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Rand firmer as risk selloff pauses, stocks down

Investors are positioning themselves for an event-packed week.

South Africa‘s rand firmed on Monday after a sharp slide in the previous week as a global sell-off in risk assets slowed, with investors positioning for an event-packed week.

Stocks weakened, led by bourse heavyweight and e-commerce group Naspers.

At 1510 GMT the rand was 0.52% firmer at 14.3725 per dollar compared with its Friday close of 14.4475 in New York.

Last week the rand and other emerging market currencies weakened as the trade spat between Beijing and Washington worsened, while solid economic data from the United States also pushed money towards the greenback.

The rand shed close to 2% in the previous week but remained one of the better performing emerging currencies as the post-election positivity limited losses, with investors awaiting the announcement of a new cabinet.

Before the announcement by incoming President Cyril Ramaphosa after this weekend’s inauguration, Statistics South Africa publishes consumer inflation data on Wednesday and the central bank decides on lending rates on Thursday.

Investors also await developments in US-China trade negotiations and the Federal Reserve minutes that may give more clues on what prompted US policymakers to strike a broadly neutral stance this month.

In fixed income, the yield on the benchmark 10-year South African government bond due in 2026 fell 1.5 basis points to 8.5%.

On the bourse, the Johannesburg all-share index fell 1.01% to 55 617 points, while the Top-40 index was 1.06% lower at 49 551 points.

Naspers led the market lower, down 3.29% to R3 210 after losses in Hong Kong technology giant Tencent , in which it has a 31% stake.

“All the tech shares in China have come under pressure and our whole market is built on Naspers,” said Greg Davies, equities trader at Cratos Capital.

A US crackdown on China’s Huawei Technologies stoked concerns about an escalating fallout in the US-China trade dispute, hitting stock markets. 

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