JSE opens flat as rand plummets on Turkish contagion

The dollar gained on the euro, with the European currency falling through $1.15 to $1.1432, as analysts predict the dollar could rally a further 5% against the euro.

The lira’s fall has affected European banks negatively, as some have large investments in Turkey. The European Central Bank (ECB) has expressed its concern about developments, as some Turkish banks might begin to default on foreign-currency loans.

On Thursday, the Russian rouble hit its lowest level against the dollar in two years, after the US announced fresh sanctions over the Novichok poisoning case in Salisbury, England.

The US said it would impose sanctions later in August, after concluding that Russia used the Novichok nerve agent to poison Sergei Skripal and his daughter Yulia.

Brent crude was 0.6% off at $71.5 a barrel. The gold price showed little response as a safe-haven investment in the light of the rampant dollar, softening 0.34% to $1,208.028/oz. However, gold stocks on the JSE were sharply higher.

The Dow closed 0.29% lower on Thursday. Asian markets were weaker on Friday with the Nikkei 225 losing 1.33% and the Hang Seng 0.77%.

At 9.38am the all share was 0.03% lower at 57,766.80 points. The top 40 also softened 0.03%. Banks dropped 2.56%, financials 1.3%, property 0.72% and food and drug retailers 0.67%. The gold index added 2.78%, platinums 1.73% and resources 0.75%.

BHP gained 0.68% to R299.56, but Anglo American slipped 0.61% to R296.28.

AngloGold Ashanti rose 3.43% to R117.56 and Gold Fields 2.31% to R48.22.

Standard Bank shed 3.52% to R189 and FirstRand 2.83% to R65.93.

Shoprite softened 1.66% to R215.13.

Nepi Rockcastle dropped 0.67% to R119.44.

Naspers was 0.06% lower at R3,349.90.