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Rand slips to six-month low, stocks firmer

Concerns over the local economy and the impact of the ongoing KPMG saga also weighed on sentiment.

The rand fell for a third consecutive session on Tuesday, briefly touching its weakest in six months as a combination of a stronger dollar and concerns about the local economy weighed.

Stocks ended higher after gains by Napsers and mining shares as some wage negotiations were resolved and some mineral prices steadied.

At 1515 GMT the rand had weakened 0.7% to 13.69 per dollar, slightly better that the 13.77 touched earlier, the currency’s weakest level since April 10.

Lower global metal prices, particularly gold, which dipped to a seven-week low, put more pressure to the rand. Stop-losses triggered a selloff by as the rand tumbled through successive technical support milestones.

The rand has now lost close to 4% in the past week as the dollar rallied on expectations of interest rate increases by the Federal Reserve and renewed signs of “Trumflation” – US President Donald Trump’s fiscal stimulus plan.

Concerns over the local economy and the impact of the ongoing KPMG saga also weighed on sentiment.

On Tuesday, the treasury admitted to lawmakers it would probably lower its growth projections and that a widening revenue gap may hinder its plan to narrow deficits and steer the country away from deeper credit rating cuts.

On the stock market, the JSE Top 40 Index was up 1.07% at 50 139 points and the broader All Share index rose 1.04% at 56 358 points.

Assore led the gains by mining companies, up almost 6% on the day to R306. Northam, Exxaro and Sibanye were all up more than 4% on the day.

Demand for some metals was driven by worries over production outages in China, although profit-taking saw copper and zinc ease back from recent highs.

Bonds were also weaker, with the yield on the benchmark paper due in 2026 up 5 basis points to 8.665%. 

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