Rand firms on risk-taking, stocks jump

The rand firmed on Monday as positive economic data from China boosted risk-sentiment, and the country’s shares posted their biggest gain in 50 days.

At 1558 GMT the rand was trading at R17.12 per dollar, 0.15% firmer than its close on Friday.

Earlier the rand had hit a session low of R16.98, helped by an improvement in sentiment toward emerging markets after China reported strong industrial growth data, easing some of last week’s fears about a slower rebound in global growth.

Lukman Otunuga, senior research analyst at FXTM, said the market was now looking towards Tuesday’s debate in the United States between President Donald Trump and challenger Joe Biden, for hints of their policy plans.

“If market players are left empty-handed with more questions than answers, this could spark a fresh wave of risk aversion that hits emerging market currencies and assets,” Otunuga said.

Locally, market participants await a second-quarter labour force survey due on Tuesday, which is expected to show a jump in the unemployment rate due to the impact of the coronavirus lockdown.

Stocks posted their biggest single day gain since August 5 on the back of a global rally, backed by data showing four consecutive months of profit growth in China’s industrial firms.

The benchmark FTSE/JSE all share index closed at 54,719 points, up 2.11%. The bluechip FTSE/JSE top 40 companies index moved up 2.08% to end the trading day at 50,579 points.

The rally was led by beaten down sectors of the economy – banks and real estate – which have taken a hard hit due to the coronavirus pandemic. JSE’s bank index was up 6.4% while the property index was up 3.85%.

Bonds weakened, with the yield on the benchmark 2030 government issue up 2 basis points to 9.45%.