South Africa's rand firmer as dollar dips on US rate cut bets

25 Jun, 2019

Stocks fell as investor anxiety mounted over this week's US-China trade talks at the G20 Summit.

At 1505 GMT the rand was 0.5pc firmer at 14.2900 per dollar.

Dollar sales have accelerated since the Fed last week signalled it would cut interest rates before year-end on mounting worries about the fallout from US President Donald Trump's trade disputes with China and others.

The United States and China have waged an 11-month trade war marked by tit-for-tat tariffs on hundreds of billions of dollars of each others' goods, roiling financial markets, disrupting supply chains and crimping global economic growth prospects.

The markets now await the outcome of the U.S-China talks at the G20 summit.

"The focus remains on trade wars as markets await the G20 summit with bated breath," said Bianca Botes, a Treasury partner at Peregrine Treasury Solutions. "The outcome of US China trade talks will set the tone."

On the bourse, the benchmark JSE Top-40 Index fell 0.91pc to 52,279.51 points while the broader All-Share Index  was down 0.7pc to 58,343 points.

"A lot of shares are waiting for the G20 Summit on Friday and the outlook between President Trump and China. There really is a risk-off feel," said Sanlam Portfolio Manager Nick Kunze.

Chemicals and energy company Sasol and retailer Mr Price were the worst performers on the blue-chip index with Sasol down 4.08pc to 350.15 rand and Mr Price 2.54pc lower at 200.29 rand.

On the upside, chemical and fertiliser company Omnia Holdings soared 11.79pc on the blue-chip index after announcing it would evaluate returns from its business units and look at cost-cutting measures.

Troubled construction company Group Five also announced that its chairwoman and three non-executive directors had resigned.

The company delisted in March after announcing it had filed for creditor protection.

In fixed income, the yield on the benchmark 2026 bond  was flat at 8.17pc.

Copyright Reuters, 2019

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