Rand, stocks falter as trade tensions rise

South Africa’s rand weakened against the dollar on Tuesday as the trade row between the United States and its key trading partners dampened risk appetite, while credit ratings agency Moody’s warned of threats to the country’s economic growth.

At 15:00 GMT, the rand traded at 13.57 per dollar, 0.2% weaker than its close on Monday. The currency has been hit by investors’ risk-aversion and negative news on the domestic economy.

The dollar rose against its rivals on Tuesday as concerns about a trade conflict between the United States and China pushed markets to unwind their bets in high-yielding currencies.

Moody’s said South Africa’s economic growth prospects will be limited by weak business confidence while uncertainty around land and mining reforms remained a concern for investors.

Moody’s is the last of the three major credit rating agencies to maintain an investment grade rating on the country’s debt. It affirmed that rating in March and revised its outlook to stable from negative citing an improving policy framework. “Should 2018 growth disappoint this would imperil South Africa’s credit rating, as Moody’s has said a credit rating downgrade for South Africa can still materialise if policy ineffectiveness continues to undermine confidence, growth and social cohesion,” Investec chief economist Annabel Bishop said in a note.

In fixed income, the yield for the benchmark government bond due in 2026 was down 3.5 basis points to 8.88%.

On the stock market, shares fell for a second straight session, led by precious metals producer Sibanye-Stillwater , whose shares slid more than 11% after another miner died at its Driefontein gold operation.

A spate of fatalities at Driefontein, including seven killed after a seismic event in early May, have brought the company’s safety record into the spotlight, rattling investors and drawing scrutiny from the government and unions.

On Tuesday, the chair of the Portfolio Committee on Mineral Resources in South Africa’s parliament, Sahlulele Luzipo, called for strong action to be taken against the company, including possibly suspending its operating licence.

The company’s share price has lost about 30 percent since the accident in early May.

The All-share index benchmark Top-40 index fell 1.14% to 49,138.59, while the wider All-share index dropped by the same percentage to 55,252.67.