UPDATE 1-South Africa's rand tracks commodity currencies higher, stocks fall

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand tracks commodity currencies higher, stocks fall
Credit: © Reuters.

(Updates with firmer rand, adds stocks)

JOHANNESBURG, Dec 12 (Reuters) - South Africa's rand ZAR=D3 climbed as much as 1.3 percent against the dollar on Monday, mainly tracking a rally in commodity currencies driven by a firmer oil price.

Stocks closed lower, with rand hedge companies with operations abroad coming under pressure from the stronger currency.

The rand reached its strongest level for the day at 13.6150, the firmest it has been in a week. By 1614 GMT it was up 0.87 percent at 13.6800 compared with Friday's close.

The rand took its cue from Latin American currencies which strengthened after OPEC and some other oil producers agreed to curb output, supporting appetite for commodity-linked assets. seems like a general trend across emerging markets, particularly the commodity-centric currencies or countries," ETM market analyst Ricardo Da Camara said.

"The OPEC and non-OPEC agreement over the weekend has pushed up oil prices quite a bit and seems to be reflected now in general commodity-centric economies and their currencies."

On the bourse, the benchmark Top-40 index .JTOPI fell 0.74 percent to 43,893 points while the All-Share index .JALSH dropped 0.73 percent to 50,528 points.

The major losers of the day were companies that reap the bulk of their revenue outside of South Africa and were therefore hurt by the firmer rand.

"It's putting some serious pressure on our rand hedges. British American Tobacco (LON: BATS ), Reinet , Richemont and all those heavy weights are coming off the back of a stronger rand," said BP (LON: BP ) Bernstein trader Vasili Tirasis.

Reinet Investments REIJ.J fell 1.86 percent to 25.91 rand, Richemont CFRJ.J dropped 0.8 percent to 89.75 rand and British American Tobacco BATJ.J fell 1.05 percent to 84.99 rand.

Further losses were curbed by petrochemical company Sasol SOLJ.J which rose 4.66 percent to 399.34 rand following a surge in the oil price.

Trading was relatively slow, with nearly 223 million shares changing hands compared with last year's daily average of is 296 million.

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