The rand took the JSE Securities Exchange South Africa (JSE) on a roller coaster ride on Friday, with the local bourse moving inversely to the volatile currency.
After opening weaker, the all share index rebounded strongly after the rand weakened in the wake of better-than-expected consumer inflation data, only to come off its highs after recouped some of its losses.
By 1216, the all share index was up 0,65%. Financials were 1,01% firmer, while the banks index was 1,28% in the black. Resources rallied 0,83%, with the gold and platinum mining indices gaining 1,40% and 1,60% respectively. The all share industrial index was flattish (+0.10%).
The rand was trading at 8,1050 to the dollar from 8,0729 when the JSE closed on Thursday, while gold was quoted at US$366 an ounce from $363,50/oz at the JSE’s last close.
“Essentially, the market trended higher prior to the release of CPIX. We saw the rand lose ground in an initial overreaction to the data, which sparked demand for rand hedge stocks,” a dealer said.
He continued that the rand had regained some ground after its initial knee-jerk reaction to the data and that the JSE had subsequently pulled back a bit, due to some profit taking in rand hedges.
“The Top 40 index was up over 1% at one stage,” the dealer noted.
The JSE nevertheless remained in positive territory — the rand remained weaker than at the JSE’s start when it had been hovering around 8 per dollar.
Shares to gain ground in morning trade included London-listed diversified resources group Anglo American, which added 1,12% or R1,40 to R126,20.
Harmony led advancers on the gold mining index, strengthening 2,40% or R2,50 to R106,50, while on the platinum mining index, Impala was up 2,08% or R10 at R491.
On the all share industrial index, Swiss-listed luxury goods group Richemont was eight cents stronger at R12,68, while pulp and paper producer Sappi surged 1,20% or R1,16 to R97,76.
London-listed IT group Dimension Data continued its strong form from recent days and was up 2,46% or 8 cents at R3,33.
On the financial index, Standard Bank (SBK) surged 1,60% or 50 cents at R31,70 and FirstRand (FSR) firmed 1,38% or 10 cents to R7,35.
Liberty International Plc (LBT) leaped 2,41% or two rand to R85,01.
Niche bank Investec delivered a superlative performance, with Investec Plc (INP) rocketing 5,38% or R4,95 to R97. Investec Ltd (INL) was up 5,23% or R4,80 to R96,50 rand.
On the JSE’s downside, London-listed beverages group SABMiller (SAB) shed 1,52% or 85 cents to R53,25, while on the financial index New Africa Capital (NAC) lost 2,73% or 15 cents to R5,35.
South Africa’s CPIX inflation (headline inflation excluding mortgage costs) was up 8,5% year-on-year (y/y) for metro and other areas in April compared with a revised 9,3% (11,2%) in March, Statistics South Africa (Stats SA) said on Friday. CPIX was up 0.3% month-on-month (m/m).
CPIX is the inflation measure targeted by the South African Reserve Bank for purposes of inflation targeting.
The release of this data was delayed by 10 days while Stats SA undertook an investigation after a computation error crept into the compilation of the data.
Prior to the announcement of the delay in the release of the data CPIX was expected to ease to a median of 10,4% y/y from March’s 11,2% y/y and February’s 11.3% y/y.
Stats SA announced on Friday that the consumer inflation data will be revised back to January 2002. – I-Net Bridge