Registered users can save articles to their personal articles list. Login here or sign up here

Rand falls on subdued risk sentiment; stocks down

Domestic data, dollar rally weakens the local currency.

The rand weakened on Thursday as a dollar rally dimmed investor appetite for riskier assets with investors taking profits ahead of the US Federal Reserve meeting later in the day.

Bourse heavyweight Naspers and banks led stocks lower.

At 1531 GMT, the rand traded at 14.07 per dollar, 1.1% weaker, having closed at R13.91 on Wednesday.

The Federal Open Market Committee (FOMC) is expected to maintain the hawkish language seen in recent policy statements, while keeping interest rates unchanged this time. The Fed has raised rates three times this year and inflation started to pick up, and it has signalled a rate rise in December.

“The strong dollar rally has caused the rand to trade defensively heading to the Fed meeting, which we don’t expect change but remains to be seen,” said ETM economist Halen Bothma.

Domestic data also dragged the rand.

South Africa’s total mining output fell 1.8% year-on-year in September compared with the consensus figure which forecast it rising 0.30%.

“The economic data isn’t doing much to boost the currency and show that there is a turnaround in the economy,” said Bothma.

In fixed income, the yield on the benchmark government bond due in 2026 rose 1 basis points to 9.155%.

In equities, the all share index was down 1.16% to 54,064 points while the top 40 index fell 1.36% to 47,638 points.

Banks were 2.01% lower and Naspers was down 2.86% to R2,796.

Technology giant Tencent, in which Naspers has a 31% stake, is reportedly cutting the marketing budget for its key gaming division.

“Tencent is reducing their budget on gaming and that seems to be hurting the stock a bit,” said Ryan Woods, trader at Independent Securities. “There has been a general lack of buying in the market today and volumes are very thin.”

Retailer TFG (The Foschini Group) soared 2.67% to R170.95 after reporting a 8.3% increase in half-year earnings, as London, Australia and local operations contributed positively to revenue growth. 

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   0

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Or choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be suspended at any time.

Podcasts

GO TO SHOP CART

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2