The Star Late Edition

Weak economic outlook puts a damper on bourse

- Reuters

STOCKS edged lower yesterday, moving further off recently scaled all-time highs as investor focus shifted to the weak economic outlook with no prospect of the central bank cutting rates next week.

The blue chip Top40 index ended 0.07 percent lower at 40 727.80 points, while the wider all share shed 0.09 percent to 45 448.28. Both indices had a late bounce towards the close of trade, having earlier been down about 0.4 percent.

Weakness in the rand, which traded near 11-week lows, failed to lift so-called “rand hedge” counters such as Lonmin, which normally can get a boost from a softer domestic currency because it earns dollars.

Lonmin lost 2.32 percent to R55.24, yielding some of the previous session’s gains that were fuelled by the company’s swing back to profit. Anglo American Platinum dropped 0.58 percent to R424.51.

The main platinum producers also face tough wage talks, which could lead to strike action, but their performanc­e was seen as a wider signal of investor concerns about sluggish economic growth.

“With the rand so weak, one not seen cutting rates next week to offer stimulus, as it remains concerned about inflation pressures, fanned in part by rand weakness.

Despite this economic backdrop, the stock exchange has been on a record run this year.

Mr Price added 1.83 percent to close at R149.89, after it posted a 22 percent rise in interim earnings and announced plans to open over 40 stores in the second half of the year.

Decliners outnumbere­d advancers 165 to 138, with 62 counters unchanged. About 185 million shares changed hands, according to preliminar­y bourse data.

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