Rand, stocks weaker af­ter hawk­ish Fed com­ments

Chronicle (Zimbabwe) - - Business -

JO­HAN­NES­BURG — The rand re­treated for a third con­sec­u­tive ses­sion on Fri­day to its weak­est level in a week against the dol­lar while stocks also fell, both as­sets pres­sured by signs the US cen­tral bank could still lift rates this year.

By 16:00 GMT the rand had slid 0.9 per­cent to 13.5065 per dol­lar, fol­low­ing a close at 13.3860 overnight in New York.

Com­ments on Thurs­day by a top Fed­eral Re­serve of­fi­cial sup­port­ing an in­ter­est rate in­crease as early as Septem­ber boosted the dol­lar, putting emerg­ing cur­ren­cies on the back­foot, with the rand among the big­gest losers in the ses­sion.

Gold prices also fell sharply, by as much 1.5 per­cent at one stage, adding fur­ther pres­sure on com­mod­ity-linked cur­ren­cies. On the bourse, stocks were also lower, with bank and re­tail shares also hit by the hawk­ish Fed.

“The theme the whole week was what the Fed is go­ing to do in terms of the rate hike,” BP Bern­stein trader Vasili Ti­ra­sis said.

“The neg­a­tive move­ment was in line with the think­ing of the Fed hik­ing rates.”

The bench­mark Top-40 in­dex was down 0.41 per­cent to 45 877 points and the broader All-share in­dex was 0.41 per­cent lower at 52 771.

Shares in South Africa’s se­cond big­gest lender by mar­ket value, Stan­dard Bank, dropped 1.93 per­cent to R15. Food re­tailer Shoprite slid 1.25 per­cent to R202.

Phar­ma­ceu­ti­cal pro­ducer Ad­cock In­gram Hold­ings gained 3.98 per­cent to R47.05 af­ter re­port­ing a 41.9 per­cent to 43 per­cent in­crease in earn­ings in their in­terim re­sults.

Trade was sub­dued with around 238 mil­lion shares chang­ing hands, com­pared with last year’s daily av­er­age of 296 mil­lion, ac­cord­ing to pre­lim­i­nary bourse data.

Gov­ern­ment bonds were also weaker, with the yield on the bench­mark pa­per due in 2026 ris­ing 7 ba­sis points to 8.475 per­cent. — Fin24

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