Rand and JSE take a knock

The rand lost nearly 3% to the dollar last week, with most of the downside coming after the budget speech and global market sell-offs. The rand reached an intraday worst of R15.19/$ in its worst week since early January. The JSE did not fare much better, with the all share losing 1.99% and the top 40 off 2.11%.

The rand lost nearly 3% to the dollar last week, with most of the downside coming after the budget speech and global market selloffs.

Global markets went into a spin on Friday over concern that inflation could begin rising too quickly as more stimulus is pumped into the economy while the recovery from the coronavirus seems on track.

Local markets had an “adverse reaction” to the budget speech, said TreasuryOne currency strategist Andre Cilliers. US treasury yields “spiked” to 1.6% on Thursday which also “put pressure” on emergingmarket currencies.

At 6pm, the rand had fallen 0.93% to R15.1363/$, 0.1% to R18.3601/€ and 0.69% to R21.1533/£. The euro had weakened 0.4% to $1.2139.

The rand reached an intraday worst of R15.19/$, recording its worst week since early January.

The JSE did not fare much better as mining stocks returned much of Thursday’s gains, which had seen the platinum index gaining the most in nine months while Anglo American reached a record high.

The all share lost 1.99% to 66,138 points on Friday and the top 40 2.11%. Resources fell 4.14%, the platinum index 3.9% and gold miners 1.28%.

Anglo American fell the most since March 19 2020, just before SA went into a hard lockdown, slumping 6.86% to R580.80. Glencore relinquished 4.13% to R61.54 and BHP 2.68% to R477.10.

Commodity prices tumbled across the board, with gold falling 2.4% to $1,727.67/oz by 6.15pm. Platinum lost 3.53% to R$1,174.89 and Brent crude 2.44% to $65.27 a barrel.

Sibanye-Stillwater had its biggest fall since October 2020, down 6.23% to R70.02. It has, however, run hard of late and is up more than 18% so far in February. Harmony Gold lost 2.08% to R57.38, bringing its 2020 losses to about 20%.

The Dow was down 0.85% to 31,135.38, while in Europe the FTSE 100 fell 2.32%, the CAC 40 1.24% and the DAX 30 0.46%.