JOHANNESBURG (Reuters) – South Africa’s rand weakened on Thursday as the dollar regained recent losses on improved economic data, while stocks kicked off the last month of the year on the backfoot as lower bullion prices hit gold mining shares.
At 1550 GMT the rand had slipped 0.05 percent weaker to 14.0800 per dollar, struggling for clear direction ahead of a ratings decision by Standard & Poor’s due on Friday.
“The decision this week remains a close call, fifty-fifty in my opinion,” said economist at Sanlam Arthur Kamp.
S&P’s rates South Africa BBB- on the investment grade level with a negative outlook. Last week Fitch and Moody’s affirmed their investment grade ratings of Africa’s most industrialised economy. [nL8N1DQ3E8]
“No matter what the outcome of the S&P review this week, failure to act decisively would still leave us on a long-term path to likely further downgrades,” Kamp said.
The greenback trimmed losses in the session as a private-sector report showed the services sector grew faster-than-forecast in November, supporting the view the United States economy is expanding at a solid clip in the fourth quarter. [nN9N1CR012]
Government bonds were weaker on the day, with the yield on the benchmark paper due in 2026 rising 7 basis points to 9.1 percent.
The blue-chip JSE Top-40 index ended 0.64 percent down at 43,412 and the broader All-share index lost 0.56 percent to 49,927.
Gold mining stocks featured on the losers board as the price of the yellow metal hit its lowest level in 10 months. [GOL/]
The precious metal has been under pressure from a strong U.S. dollar and rising Treasury yields since President-elect Donald Trump disclosed policy plans that signalled faster inflation.
“We certainly haven’t been the benefactor of the new president-elect in the U.S., emerging markets have been under loved,” boutique fund management firm Vestact said in a note.
Gold Fields slumped 4.37 percent to 42.65 rand, Sibanye Gold lost 3.8 percent to 28.06 and AngloGold Ashanti dropped 2.8 percent to 150.99
About 276 million shares changed hands, slightly below last year’s daily average of 296 million shares.
(Reporting by Mfuneko Toyana and Tiisetso Motsoeneng; Editing by James Macharia)
