Rand gains, JSE de­clines as MTN slides

The Star Early Edition - - PRICES -

THE RAND gained yes­ter­day as the dol­lar fell af­ter the US re­ported weaker-than-ex­pected in­fla­tion and re­tail sales data.

At 5.30pm, the rand traded 1.25 per­cent higher at R12.60 to the dol­lar, af­ter clos­ing at R12.76 overnight in New York, bring­ing weekly gains to around 2.5 per­cent.

The un­ex­pected de­cline in monthly US con­sumer prices and re­tail sales sug­gested in­fla­tion pres­sures were mod­er­at­ing, which might de­lay in­ter­est rate in­creases by the Fed­eral Re­serve.

The prospect of slower-than-ex­pected US rate in­creases boosts de­mand for emerg­ing-mar­ket as­sets, which of­fer higher re­turns but carry more risk.

The rand held on to gains de­spite con­tin­ued fall­out trig­gered by credit rat­ings down­grades.

A sur­vey showed yes­ter­day that South African busi­ness con­fi­dence fell deeper into neg­a­tive ter­ri­tory in the sec­ond quar­ter, to a level not seen since the 2009 re­ces­sion, as busi­ness ac­tiv­ity re­mained week and po­lit­i­cal risk per­sisted .

Gov­ern­ment bonds also gained, with the yield for the bench­mark in­stru­ment due in 2026 drop­ping.

Mean­while, stocks ended lower as mo­bile phone op­er­a­tor MTN slid to a four-month low.

Shares in MTN were down 1.98 per­cent at R111.60. The com­pany counts crude-oil pro­duc­ers Nige­ria and Iran among its three largest mar­kets, and oil price fell af­ter re­ports showed global sup­ply was grow­ing. Royal Bafo­keng Plat­inum re­treated 5.02 per­cent to R27.27.

Gold min­ing firms were among the gainers as the bullion price rose af­ter the US in­fla­tion data.

The bench­mark Top40 in­dex fell 0.4 per­cent to 45 084.86 points. The broader all share in­dex was down 0.26 per­cent at 51 489.16 points.

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