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Local stocks, rand weaker after rally

Banks weigh on bourse.

JOHANNESBURG – The rand gave up gains on Thursday as traders booked profits after the currency rallied overnight on diminishing bets of a US interest rate increase and higher gold prices.

At 1500 GMT the rand was 0.15% weaker at 13.1975 compared to its overnight close of 13.1775.

Minutes from the last US Federal Reserve meeting showed some members favoured a halt to rate hikes until the inflation trajectory was clear.

The news saw most emerging market currencies strengthen, with buying of commodity currencies also supported by higher gold prices.

The rand rallied overnight to reach 13.1300, its firmest since August 8, and was on the front foot for most of the session before stumbling lower as traders booked profits ahead of the weekend.

On the stock market, shares eased with banks under pressure as investors booked profits.

The JSE Top-40 index was off 0.3% at 49,065 and the broader All Share Index finished 0.21% lower at 55 415.

Barclays Africa dropped 1.20% to R147.89, while Nedbank lost 1.10% to R225.00 and Standard Bank was down 1.06% to R162.13.

“The banks just had a very good run and are looking a little over-bought in the short term as a result we’re seeing a bit of profit taking,” said BP Bernstein trader Vasili Girasis.

Shares of companies with operations abroad that make the bulk of their revenue outside South Africa, and tend to benefit from a weaker rand, also weighed on the bourse.

“The rand being stronger has hurt our resource counters and dual-listed stocks,” added Girasis.

Luxury goods maker Richemont was down 0.58% to R112.93, while British American Tobacco lost 0.45% to R823.00.

Bonds firmed, with the yield on benchmark paper due in 2026 falling 4 basis points to 8.505%. 

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