Rand strength­ens, stocks close lower

The Star Early Edition - - BUSINESS REPORT -

THE RAND firmed yes­ter­day as the US dol­lar fell against a bas­ket of cur­ren­cies, with in­vestors cau­tious about in­creas­ing bets on the green­back be­fore get­ting fresh clues on the US econ­omy and the tim­ing of in­ter­est rate rises.

Stocks were hit by heav­ily weighted rand hedges com­ing un­der pres­sure from a strong cur­rency.

At 5pm, the rand traded at R13.6250 to the dol­lar, 1.46 per­cent firmer from its New York close on Tues­day.

The dol­lar in­dex, which mea­sures the green­back against a bas­ket of six ma­jor ri­vals, fell 0.42 per­cent to 102.78, hav­ing hit a peak of 103.82 on Tues­day.

“The closer we get to Fri­day and the US em­ploy­ment data we should see the dol­lar mo­men­tum start to pick up again but in the mean­time it’s all a bit of a drag,” Stan­dard Bank head of for­eign ex­change spot trad­ing, War­rick But­ler, said in a note.

On the bond mar­ket, gov­ern­ment bonds also firmed and the yield for the bench­mark in­stru­ment due in 2026 fell.

On the bourse, the bench­mark JSE Top40 in­dex dropped 0.67 per­cent to 43 963.22 points, while the all share in­dex dipped 0.51 per­cent to 50 760.24 points.

Rand-hedged stocks, or those that reap the bulk of their rev­enue out­side the coun­try, led the de­cline as the rand gained ahead of US em­ploy­ment data.

“The rand is play­ing havoc with your dual listed stocks,” said BP Bern­stein trader, Vasili Ti­ra­sis. Richemont fell 1.96 per­cent to R88.25, Bri­tish Amer­i­can

To­bacco dropped 1.19 per­cent to R770.50 and BHP Bil­li­ton de­clined 1.92 per­cent to close at R219.50.

Trad­ing was slow on the bourse yes­ter­day, with a to­tal of around 145 mil­lion shares chang­ing hands com­pared with last year’s daily av­er­age of 296 mil­lion.

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