UPDATE 1-South Africa's rand recovers, miners lead stocks lower

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand recovers, miners lead stocks lower
Credit: © Reuters.

JOHANNESBURG, 21 July - South Africa's rand firmed against a weaker dollar on Friday, recovering from losses in the previous session after the central bank unexpectedly cut its benchmark lending rate for the first time in five years. dipped amid a sell off in mining shares on the back of a stronger rand.

At 1503 GMT, the rand ZAR=D3 traded at 12.9400 per dollar, 0.77 percent firmer than its New York close on Thursday.

In fixed income, government bonds extended gains on the rate cut, with the benchmark yield ZAR186= dipping 3.5 basis points to 8.515 percent.

"The question now remains where to from here? We know that any cutting cycle will not be too deep and so cheaper funding rates shouldn't be a massive support for our bonds," Rand Merchant Bank analyst Gordon Kerr wrote in a note.

"As a result, we still remain subject to the global environment, with particular focus on the (Federal Reserve) as its meeting is coming up next week."

On the bourse, the benchmark Top-40 index .JTOPI lowered 0.23 percent to 47,802 points while the All-Share index .JALSH dipped 0.23 percent to 54,163 points.

The mining sector .JMINI led the bourse lower after falling 1.2 percent on the back of a stronger currency.

"Its in a relatively stronger rand environment so there's a bit of a sell off in the miners," said Cratos Capital stock broker Yusuf Moola

Assore ASRJ.J fell 3.17 percent to 198.51 rand, Anglo American (LON: AAL ) plc AGLJ.J dropped 1.35 percent to 184.50 rand and African Rainbow Minerals ARIJ.J lowered 2.09 percent to 84.15 rand.

Further losses came from retailer Truworths International TRUJ.J which fell 1.26 percent to 77.51 rand after flagging stalling full year profits.

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