Rand firms on risk-on mood, stocks inch up

South Africa’s rand firmed on Wednesday, tracking its emerging market peers after comments from US President Donald Trump spurred hopes of a resolution to the trade dispute between the United States and China.

At 1550 GMT the rand was 0.47% firmer at 14.73 per dollar. The unit is often considered one of the most liquid currencies in emerging markets and susceptible to global signals.

Trump said on Tuesday the United States and China were close to agreement on the first phase of a trade deal and that Washington was in the “final throes” of work that would defuse a 16-month trade war with Beijing.

“With ‘great steps’ being made with the trade deal and phase one almost done according to sources, we have seen risk-on sentiment coming to the fore and risky assets such as the equity and EM markets,” Andre Botha, senior currency dealer at TreasuryONE, said in a note.

“While the good news is welcome, we feel that unless the first phase of the deal is signed there is still a lot of risks that someone could do a U-turn on the deal, which could see a swift return to volatility in the market.”

On the bourse, stocks also inched up on the improved sentiment.

The benchmark JSE Top-40 Index rose 0.18% to 49 910 points while the broader All-Share Index also advanced 0.18% to 56 156 points.

Dual-listed stocks were the biggest winners on the blue-chip index, with bank Investec up 4.27% to R84.98 and British American Tobacco up 2.69% to R582.36.

Retailer Woolworths was down 4.85% to R54 after reporting that sales at its struggling clothing brand David Jones had declined by 2.1% amidst tough trading conditions in Australia.

Read: Woolworths increases sales in tough environment

Investment firm Brait tumbled 11.82% after announcing a recapitalisation plan to tackle unsustainable debt that would include issuing 150 million pounds of convertible bonds.

Read: Orthotouch BRP aims to negotiate a ‘concrete’ offer for investors

In fixed income, the benchmark government issue due in 2026 dipped 4.5 basis points to 8.43%.