Rand softer, plat­inum min­ers boost JSE

The Star Early Edition - - PRICES -

THE RAND re­treated yes­ter­day de­spite bet­ter-than-an­tic­i­pated in­fla­tion and re­tail fig­ures, as some in­vestors booked re­cent prof­its ahead of an in­ter­est rate de­ci­sion to­day.

At 5pm, the rand was bid at R12.9383 to the dol­lar, 1.05c softer than at the same time on Tues­day, down from a close of R12.8925 pre­vi­ously and af­ter gain­ing in five con­sec­u­tive pre­vi­ous ses­sions.

Lo­cal data showed con­sumer in­fla­tion at its low­est in 19 months (5.1 per­cent) and well be­low the Re­serve Bank’s up­per tar­get of 6 per­cent, prompt­ing some in­vestors to price-in a higher prob­a­bil­ity of a rate cut.

The bank has hiked rates by 200 ba­sis points since 2014 but over the last 12 months has kept them on hold at 7 per­cent, say­ing its tight­en­ing cy­cle had come end.

An­a­lyst at Credit Suisse, Car­los Teix­eira, said fall­ing in­fla­tion and the re­silient currency jus­ti­fied a rate cut.

“There is suf­fi­cient cush­ion in the fore­cast pro­file for in­fla­tion to with­stand some re­newed currency weak­ness, which would not be trig­gered by a cut of 50 ba­sis points,” Teix­eira said.

Mean­while, stocks firmed as plat­inum min­ers lifted the bourse.

The bench­mark JSE Top40 in­dex gained 1.75 per­cent to 47 748.68 points, while the wider all share in­dex ended 1.56 per­cent higher at 54 091.11 points.

Lon­min ex­tended gains made on Mon­day af­ter it cut costs and an­nounced im­proved min­ing per­for­mance in the third quar­ter. The plat­inum pro­ducer’s shares climbed 10.21 per­cent to R15.98, also lifted by a higher plat­inum price.

The re­tail in­dex was up 1.63 per­cent fol­low­ing the re­lease of pos­i­tive re­tail sales data for May.

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