RAND SLIPS, STOCKS WEAKER

THE RAND weakened against a dominant dollar yesterday, erasing the previous day’s gains as investors awaited upcoming data and policy speeches. read more

At 5.30pm, the rand traded at R14.49 against the dollar, 0.6 percent weaker than its previous close.

In the absence of major shifts in South Africa, the rand has taken its cue from global sentiment in recent weeks.

Although rand assets offer some of the highest real returns in major emerging markets, the South African economy faces challenges, including a rapid build-up in public debt exacerbated by the Covid-19 pandemic.

Government bonds firmed, with the 2030 issue yielding 9.15 percent, down 4 basis points.

On the Johannesburg bourse, shares dropped with the opening of the US market, which saw a technology-led stock sell-off.

The JSE all share index closed down 0.62 percent at 66 173.97 points, and the blue-chip Top40 index dropped 0.65 percent to 60 376.47 points.

The banking indice fell 0.64 percent to 6876.95 points.

Bourse heavyweight Naspers lost 1.94 percent to R3 246.83.

Meanwhile, palladium soared to a record high yesterday on worries over short supplies of the metal used in emissions controlling devices in vehicles, while gold fell 1 percent after US Treasury secretary Janet Yellen said interest rates may need to rise.

Spot palladium eased 0.2 percent to $2,965.35(about R42 802) an ounce by 6.32pm, after hitting an all-time high of $3 017.18.

Spot gold, meanwhile, fell more than 1 percent after Yellen said US interest rates may need to rise to prevent the economy from overheating as more support programs come on line.

Gold was last down about 1 percent at $1 775.02. US gold futures were down 1 percent at $1 774.70.

Higher interest rates increase the opportunity cost of holding non-yielding bullion.