RAND FLAT, STOCKS RECOVER

THE RAND reversed earlier losses yesterday, as traders digested news of strong gains in March US inflation, although that was not expected to alter the US Federal Reserve’s commitment to keep interest rates at rock-bottom levels for years.

At 5pm the rand was flat at R14.57 to the dollar, after hitting a session low of R14.68. The dollar fell to three-week lows after inflation data.

Investors mainly focused on US inflation data for further indications on the direction of lending rates in the world’s biggest economy.

Accommodative US monetary and fiscal policy has fuelled flows to riskier emerging market assets, but a steady rise in Treasury yields has raised fears of a quicker rise in rates.

Stocks rose on the JSE yesterday as global markets recovered after Monday’s heavy sell-off.

The benchmark all share index closed up 1.03 percent at 67 072.49 points while the blue-chip Top40 index ended up 1.17 percent to 61 382.99 points.

The gains were broad-based with most major indices such as banks, resources and industrials ticking up on hopes that despite rising inflation, US interest rates will not go up.

In fixed income, the yield on the benchmark 2030 government issue was down 1.5 basis points at 9.34 percent.

Meanwhile, the Organisation of the Petroleum Exporting Countries (Opec) yesterday raised its forecast for growth in world oil demand this year on expectations the pandemic will subside, providing help for the group and its allies in their efforts to support the market.

Demand will rise by 5.95 million barrels per day (bpd) in 2021, which is 6.6 percent, Opec forecast in its monthly report. That is up 70 000 bpd from last month.

Oil gained further towards $64 (about R933) a barrel after the report was released yesterday. Prices have risen to pre-pandemic highs above $70 this year.