UPDATE 1-South African rand, stocks weaker on renewed trade war

  • Reuters
  • Forex News
UPDATE 1-South African rand, stocks weaker on renewed trade war
Credit: © Reuters.

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JOHANNESBURG, May 9 (Reuters) - South Africa's rand gave up its earlier gains on Thursday as another round of risk selling in global markets fuelled by the U.S.-China trade talks outweighed local election positives.

Stocks fell as well, with Steinhoff SNHJ.J being the biggest loser on the Johannesburg all-share index .JALSH .

The ruling African National Congress (ANC) is on course to retain power after Wednesday's election, though it may be the party's worst performance in a national vote since the end of white minority rule 25 years ago. at early results, it seems that the ANC will win the election as expected with around 54-57 percent of the vote. This will give enough power to the ANC to enact policy reforms and this should be rand positive," TreasuryONE senior dealer Andre Botha said in a note.

"The current situation does not help the rand at all with the (U.S.-China) trade deal being in limbo, and the threat of further tariffs being imposed will in all likelihood negate the election positives," Botha added.

At 1540 GMT, the rand ZAR=D3 traded at 14.4175 per dollar, 0.21 percent weaker than its New York close on Wednesday.

U.S. President Donald Trump said on Wednesday that China "broke the deal" it had reached in trade talks with the United States, and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing "stops cheating our workers." the stock market, the main indexes touched a more than a one-month low on risk-off trade. The Top-40 .JTOPI index was down 2.79 percent to 50,264 points, while the broader all-share .JALSH fell 2.67 percent to 56,496 points.

"In general, the markets are in a bit of a risk-off mode at the moment. Trump has given everyone a bit of a scare with his latest tweets and threats of a tariff," ETM Analytics analyst Lloyd Miller said.

Shares in Steinhoff tumbled 20.40 percent to 1.60 rand after the retailer reported a $4 billion operating loss in the 2017 fiscal year on Tuesday. SAPJ.J weakened 8.53 percent to 61.10 rand after the packaging and paper firm reported a 11 percent decline in earnings before interest, tax, depreciation and amortization, for the second quarter. Ashanti Ltd ANGJ.J fell 1.44 percent to 168.74 rand after the gold miner said it will review divestment options for its Mponeng mine and other South African assets to focus on higher returns elsewhere. fixed income, the yield on the benchmark instrument due in 2026 ZAR186= was down 5 basis points to 8.55 percent.

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  • michael morris @michael morris
    only taken ANC 25 years to come to this Rand "strengthen" strategy... fingers crossed
    Like 0