Surging Covid-19 weighs on rand
The rand reached its worst level in more than a month on Friday as concern about an economic recovery and the rise in coronavirus cases weighed on global market sentiment.
At 5.10pm, the rand had weakened 1.47% to R17.1818/$ after reaching R17.27/$, its worst level since August 21. It had weakened 0.94% to R19.9679/€ and 1.19% to R21.8257/£. The euro had fallen 0.4% to $1.1622. The rand has lost 18.2% this year. The yield on the R2030 bond had risen five basis points to 9.54%. Bond yields move inversely to prices.
The JSE all share fell 1.22% to 53,587.11 points and the top 40 1.16%. Banks lost 1.4% and financials 2.09%. The all share has fallen 1.99% over the past five trading days.
Investors remain worried about the rise in the number of Covid-19 cases, which could disrupt an economic recovery in some of the world’s economic hubs. The number of cases in the US surpassed 7-million on Friday.
Shortly after the JSE closed, the Dow was up 0.31% to 26,899.10 points. In Europe, the FTSE 100 was up 0.22%, while France’s CAC 40 lost 0.89% and Germany ’ s DAX 30 1.22%.
Earlier, the Shanghai composite was down 0.12% and Hong Kong’s Hang Seng 0.32%, while Japan’s Nikkei 225 added 0.51%.
Oanda senior market analyst Craig Erlam said: “The same old issues are holding these markets back: considerable economic and political uncertainty — particularly in the US — worrying Covid-19 trends in Europe, and a lack of new fiscal and monetary support measures in Washington.”
Markets will be closely watching the first debate between US President Donald Trump and Democratic presidential nominee Joe Biden this week ahead of the US election in November, an event that analysts say will be a crucial driver of global market sentiment.
“The election could increasingly become a point of concern for investors. It’s already not going to be a normal election, with the votes taking much longer than normal to count,” Erlam said.
Gold was down 0.35% to $1,860.95/oz and platinum 0.31% to $847.90. Brent crude lost 0.22% to $41.64 a barrel.
Locally, investors will be watching for the release of unemployment figures for the second quarter on Tuesday and consumer inflation for August, due out on Monday.