Rand tumbles further against dollar

SOUTH Africa’s rand weakened against the dollar and stocks tumbled on Friday as stronger US jobs data bolstered the case for a rate hike by the Federal Reserve at next week’s policy meeting.

Mining firms were hit hard by falling commodity prices, breaking a two-day winning streak on the stock market.

At 1600 GMT, the rand extended losses, weakening more than 2% to 13.8500 per dollar compared with its previous close of 13.5645.

US nonfarm payrolls rose less than expected, to 173 000, in August, but a drop in the unemployment rate to a near seven-and-a-half-year low of 5.1% and an acceleration in wages kept alive prospects of a Fed interest rate hike later this month.

The upwardly revised July nonfarm payrolls figure sent the rand into volatile territory.

The benchmark Top 40 index ended 2.88% lower at 43 547, and the All Share index lost 2.6% to 49 102.

Kumba Iron Ore slipped 7.2% to R85.87. African Rainbow Minerals lost 4.3% to R66 after the company said full-year earnings more than halved due to softer prices.

Global equity markets tumbled and the dollar traded mixed after the US jobs data kindled uncertainty.

The CBOE Volatility Index, Wall Street’s so-called fear gauge, was up 6.9% at 27.17, or about double the rate it traded at all year until mid-August.

Major US and European stock indices were poised to end the week lower.

The Pan-European FTSEurofirst 300 index was down 2.17% at 1 397.80. MSCI’s all-country world stock index was down 1.34%.

On Wall Street, the Dow Jones industrial average fell 1.23% to 16 172.73. The S&P 500 slid 1.02% to 1 931.17, and the Nasdaq Composite lost 0.53% to 4 708.32.

The dollar index of major currencies traded rose 0.09%, while the dollar was down as much as 1% against the yen.

Brent crude was down 59c at $50.09 a barrel. —