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Rand weaker as momentum stalls, stocks flat

Stocks flat; Barclay’s earnings improve but shares slide.

JOHANNESBURG- The rand weakened on Friday, faltering in the face of technical barriers and political worries after an executive at the power utility Eskom was suspended pending an investigation into graft allegations.

Stocks were little changed on both the Top40 index and the wider All Share index. The former closed at 48 551.29 points, the latter at 54 883.21.

By 1545 GMT, the rand had weakened 0.17% to 13.0125 per dollar, compared with a close of 12.9900 overnight in New York, extending losses to a second consecutive session as it failed to break the 12.80 resistance level.

“The rand once again failed to make any meaningful or sustained gains, faltering short of the 12.8000 technical pivot. We remain in the greater range which has been prevalent for some time now,” said analyst at Nedbank Reezwana Sumad.

Sentiment towards the currency was also hurt by reports late on Thursday that the chief financial officer of state power firm Eskom, Anoj Singh, had been placed on special leave. Eskoom said it was investigating claims Singh had granted preferential treatment to bidders supplying coal to the state-owned company .

Eskom relies on state guarantees amounting to about R350 billion to stay afloat. Rating agencies have called it a danger to the country’s credit status.

Bonds were weaker, with the yield on the benchmark 2026 paper up 7.5 basis points to 8.595%.

In stocks, the mining index was up 0.8% and the bullion index up 2.74% as global resource prices climbed. Underwhelming economic growth in the United States bolstered bets US interest rates would remain low.

Gold Fields rose to R51.46 and Anglogold Ashanti shares to R131.40, both gaining more than three percent.

Shares of the South Africa arm of the Barclays Group fell 2% to R144.78 despite reporting that half-year profit rose 7%. 

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