You are currently viewing our desktop site, do you want to visit our Mobile web app instead?
 Registered users can save articles to their personal articles list. Login here or sign up here

Rand weaker after US Fed holds lending rates, stocks gain

Sentiment focused on local elections next week.

The rand weakened on Thursday, alongside emerging markets, after the United States central bank kept benchmark lending rates unchanged, but struck a hawkish tone.

Meanwhile, an uptick in vehicle sales lifted car retailers.

At 16:09 GMT the rand was 0.59% weaker than its New York close, at 14.54 per dollar.

The US Federal Reserve on Wednesday held interest rates steady and signalled little appetite to adjust them any time soon, but with headwinds on the horizon for emerging markets, including rising oil prices and political uncertainty, investors opted to keep holding dollars.

Sentiment however remains focused on South Africa’s election next week, with the vote set to be the most tightly contested since the end of apartheid 25 years ago and the ruling African National Congress’s large majority set to narrow due to anger over unemployment and poverty.

Three polls this week showed the ANC, led by Cyril Ramaphosa, clinching a narrow majority, an outcome seen by many investors as key to the policy certainty necessary to reignite economic growth which has flat lined in the last decade.

Bonds also weakened, with the yield on the benchmark 10-year government issue up 6 basis points to 8.610%.

On the bourse, stocks rose with the benchmark Top-40 index up 0.42% to 52,495.40 while the Johannesburg broader All-Share Index closed 0.37% up at 58,743.56.

A 0.7% increase in new vehicle sales in April provided some comfort to car retailers such as Combined Motor Holdings, Bidvest Group and automotive group Motus holdings, which rose 1.34, 2.34 and 2.25% respectively.

Health and wellness group Ascendis Health jumped nearly 8% after announcing plans to sell three businesses in its Biosciences division for R480 million. It pared gains to close 1.58% firmer.

“In the absence of any local news and volumes we kind of take our cue from international markets,” said Avior Capital Markets trader Jacques Potgieter, adding that markets will be fairly low for the next week going into elections and likely for a week or two after.

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.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE





Follow us:

Search Articles:Advanced Search
Click a Company: