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

JOHANNESBURG: 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 ended up 0.73% to 60,921 points, hitting a two-year peak. The bluechip index FTSE/JSE top 40 companies 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 up almost 3% and the resources index 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 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 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 up 2.5 basis points to 8.685%.