Korean penin­sula tensions weigh on JSE

The Star Early Edition - - PRICES -

STOCKS pulled away from record highs yes­ter­day as ris­ing tensions on the Korean penin­sula drove in­vestors to limit risks and shift to safe havens.

But the rand firmed, re­cov­er­ing ground fol­low­ing a slide to a onemonth low af­ter Pres­i­dent Ja­cob Zuma sur­vived a no-con­fi­dence vote. It re­mained vul­ner­a­ble to weak eco­nomic fun­da­men­tals and po­lit­i­cal un­cer­tainty.

On the bourse, the JSE all share in­dex de­clined 0.5 per­cent to 55 700.64 points, shed­ding 696 points from a record high of 56 396 points hit on Mon­day, while the Top40 in­dex dropped 0.54 per­cent to 49 303.27 points.

“Gen­er­ally a softer trend, which is fol­low­ing over­seas mar­kets. Peo­ple are be­ing a lit­tle bit more cau­tious re­ally, they are not rush­ing into buy­ing stocks,” Cratos Cap­i­tal equities trader, Greg Davies, said.

North Korea’s ap­par­ently rapid progress in de­vel­op­ing nu­clear weapons and mis­siles ca­pa­ble of reach­ing the US main­land has fu­elled tensions that erupted into a war of words be­tween Wash­ing­ton and Py­ongyang this week, un­nerv­ing re­gional pow­ers and global in­vestors.

In cur­rency mar­kets, the rand was bid at R13.3531 to the dol­lar at 5pm, 12.11c firmer than at the same time on Wed­nes­day.

Traders said weak­nesses in re­cent weeks had pushed the rand into an over­sold ter­ri­tory.

“But it is still vul­ner­a­ble, the back­drop is still neg­a­tive and it is un­likely that this a turn­ing point,” said ETM’s econ­o­mist, Halen Bothma.

South Africa’s an­nual fac­tory out­put dropped 2.3 per­cent in June, while min­ing pro­duc­tion slipped 0.8 per­cent, of­fi­cial data showed yes­ter­day.

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