MARKETS WRAP

RAND UP ON INFLATION DATA

THE RAND firmed yesterday after data showed inflation quickened to 4.5 percent in January from 4 percent in December, broadly in line with expectations.

The rand has taken a hit from a stronger dollar and pessimism over the South Africa’s growth outlook.

At 5pm, the rand bid at R14.9925 to the dollar, 4 cents stronger than at the same time on Tuesday.

On the JSE, stocks closed higher, with the blue-chip Top40 index up 0.39 percent at 52 126.58 points, while the broader all share index also gained by the same margin to 57 940.97 points.

Meanwhile, emerging market assets regained footing yesterday, as worries about the spread of the coronavirus eased after the rate of new infections slowed and as investors took comfort from China’s efforts to contain the epidemic’s economic impact.

Chinese authorities yesterday reported the lowest daily rise in cases since January 29, helping ease concerns about the rising financial impact of the outbreak after Apple and HSBC said the epidemic was damaging their businesses.

Investors were also optimistic about a raft of measures Chinese policymakers have implemented to support their economy in the face of the coronavirus epidemic, which is expected to take a heavy toll on first-quarter growth.

“Equities have remained relatively sanguine as the government is making efforts to mitigate the impact of the containment measures on businesses,” said Bas van Geffen, quantitative analyst at Rabobank.

MSCI’s index of emerging market stocks gained 0.5 percent after posting its worst fall this month on Tuesday.

Even as the decline in new cases offered some relief, analysts were wary of the rising risks to global economic growth from the outbreak.

Among currencies, Turkey’s lira weakened against the dollar ahead of an interest rate decision by the country’s central bank. Traders expect the policy rate to be cut by 50 basis points to 10.75 percent. Russia’s rouble also strengthened in tandem improving global risk sentiment. I Reuters