UPDATE 1-S.Africa stocks hit two-year record on higher precious metal prices, rand weakens

  • Reuters
  • Forex News
UPDATE 1-S.Africa stocks hit two-year record on higher precious metal prices, rand weakens
Credit: © Reuters.

(Recasts with updates prices)

JOHANNESBURG, Jan 5 (Reuters) - Shares on the Johannesburg Stock Exchange (JSE) remained upbeat on Tuesday, driven by higher gold and platinum prices which pushed up shares in mining companies and posted a record closing for the main indices.

However, the rand clawed back a substantial part of its gains seen in the last few weeks forcing it to cross the 15 rand per dollar mark on Tuesday.

The FTSE/JSE all-share index .JALSH ended up 0.73% to 60,921 points, hitting a two-year peak. The bluechip index FTSE/JSE top 40 companies .JTOPI closed up 0.97% to 55,976 points, racing past its all-time high number last seen in mid-December.

The rally was mainly led by higher gold and platinum prices with the gold indices .JGLDX up almost 3% and the resources index .JRESI crossing 1%.

Safe-haven gold inched up on Tuesday to a two-month high on the back of a weak dollar which bore the brunt of uncertainty of the outcome of the U.S. senate runoffs in Georgia which will decide which party will control the Congress.

Platinum XPT= was up 0.6% at $1,076.86, having hit a more than four-year high of $1,127.82 on Monday.

However, the shares of banks, which are usually a reflection of the country's economic outlook, continued to decline with the index down 2.4% on Tuesday.

However, the rand lost over 2% versus the dollar, its biggest single day fall in over three months. At 1625 GMT, the rand ZAR=D3 was trading down 2.14% to 15.0425 rand against the dollar. It had opened the day at 14.7150.

Annabel Bishop of Investec Ltd said in a note that while globally news of more vaccine approvals and more people being vaccinated could be boost for riskier currencies, locally, "patchy natures of recoveries" could be a dampener.

There is speculation that South Africa could announce a higher level of lockdown as the country wrestles with an increasing number of coronavirus cases.

Bonds weakened, with the yield on the benchmark 2030 government issue ZAR2030= up 2.5 basis points to 8.685%.

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