Rand weaker for third day, stocks continue climb

The South African rand weakened for the third day in a row on Wednesday as a stronger U.S. dollar and speculation over further lockdown restrictions weighed on sentiment.

But the local stock market continued to climb, helped by gains for mining firms.


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Talk of new restrictions that would exacerbate an already bleak economic outlook came as the country’s National Coronavirus Command Council, which makes recommendations to the cabinet, met to discuss rising COVID-19 infections and deaths.

Africa’s most industrialised economy has recorded the most COVID-19 cases and deaths on the continent, with more than 1.1 million infections and over 30,000 deaths to date.

At 21:47, the rand was down roughly 2.85% at 15.0915 against the dollar from an overnight close of 14.9900.

Government bonds were little changed, with the yield on the benchmark 2030 bond up 1 basis point at 8.695%.

But the Johannesburg Stock Exchange’s All-share index ended up 1.54% at 61,857 points, its highest ever.

The Top-40 index closed up 1.61% at 56,878 points, also a new peak.

Traders said the major boost to the indices came from heavyweight commodity companies that do not clearly reflect the state of the domestic economy and are largely dependent on global factors.

“The main theme is that resource and commodity stocks are doing a lot better,” said Greg Davies, a trader with Cratos Capital. The weaker rand was helping commodity stocks, he added.

Source: moneyweb.co.za