EMERGING MARKETS

THE RAND firmed yesterday as the dollar fell, although a resurgence of new coronavirus cases globally and fresh evidence of the weakness of the local economy kept sentiment cautious.

At 5pm the rand gained about 0.97 percent at R17.02 to the dollar.

With Covid-19 cases rising sharply in the US, as well as in developing economies, such as India, Brazil and South Africa, investors were wary.

Locally on Tuesday, a survey showed consumer confidence plunged to a 35-year low in the second quarter, while ratings firm Fitch warned about the country’s ability to execute plans to slash spending, also hurting the rand.

“South Africa’s economic fragilities have rendered the ZAR vulnerable to external shocks, meaning the currency will remain at the mercy of broader sentiment dynamics,” said market economists at ETM Analytics in a note.

However, local sentiment and higher gold prices have bolstered the JSE.

The all share index rose 1.13 percent at 55870.69 points, while the JSE Top40 companies’ index advanced 1.25 percent to 51558.75 points.

The JSE’s gold index, representing top five gold miners, rose 3.49 percent, strengthened by a robust gold market, which is seen by investors as a safe haven store of value.

Banks also led gains, with the banking index up 4.21 percent.

In fixed income, the yield on the benchmark government issue due in 2030 was down 0.5 basis point to 9.685 percent.

Meanwhile, most emerging market currencies moved lower yesterday as safe-haven demand pushed up the dollar, while concerns over rising coronavirus cases capped gains in equities.

Weak oil prices continued to pressure Russia’s rouble, while its peers in Europe, Africa and the Middle East edged lower. I Reuters