UPDATE 1-South Africa's rand slips, heavyweight miners push stocks to fresh record highs

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand slips, heavyweight miners push stocks to fresh record highs
Credit: © Reuters.

(Updates rand , adds bonds and stocks)

JOHANNESBURG, March 2 (Reuters) - South Africa's rand weakened on Tuesday in a broad, developing world currencies retreat against a strong U.S. dollar, while stocks hit a fresh record high as rising commodity prices lifted assets in the resource-rich region.

By 1615 GMT, the rand ZAR=D3 weakened 0.22% to 15.0325 against the dollar, losing ground after a recovery rally that took it to a session-best 14.9000 on Monday.

Government bonds also weakened and the yield on the instrument due in 2030 ZAR2030= jumped 11 basis points to 9.050%.

Soaring U.S. bond yields, drawing yield-searching investors back into the greenback, led to a rout of risk assets last week and dragged the rand to one-month lows. base case for strong global growth and rising commodity prices should be supportive of EM FX generally, and with broader commodities outperforming, the ZAR continues to be front of mind in benchmarking EM currencies against global reflation scenarios," said analysts at London-based MUFG Securities.

"While the case for ZAR longs is global in tone, the domestic backdrop for currency strength is more mixed."

Stocks closed firmer, with the Johannesburg All-Share index .JALSH up 1.44% to a fresh record high of 68,510 points, while the Top-40 index .JTOPI climbed 1.61% to a record 63,104 points.

Leading the gainers was diversified manufacturer KAP Industrial KAPJ.J , which jumped 7.90% after the country's seasonally-adjusted Absa (JO: ABGJ ) Purchasing Managers' Index (PMI) expanded at a faster pace in February compared with January on Monday. a slow and concerning start to the year, it would seem that the manufacturing sector has turned a corner if the latest PMI figures are anything to go by," Jee-A van der Linde, an economist with NKC African Economics, said in a note.

Heavyweight mining stocks .JMINI also firmed, with platinum miners .JPLAT up 3.39% and Johannesburg-listed Anglo American (JO: AMSJ ) Plc AGLJ.J and BHP Group PLC BHPJ.J up 1.91% and 2.38% respectively on strong commodity prices.

"There is greater enthusiasm about the outlook for commodity prices, which is widely forecast to strengthen from robust growth in China and the prospect of increased infrastructure investment in developed countries," economists at Nedbank said.

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