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Stocks edge higher led by miners, banks weak
Rand hits 1-week high, stocks edge higher
Rand boosted by record-high gold
November 6, 2009
South Africa's rand advanced to a one-week high against a wobbly dollar on Friday and as gold traded near record highs, which also boosted local stocks.
The Johannesburg Top-40 index gained 0.17 percent to 23 336.95 points, while the broader All Share index added 0.14 percent to 25 933.45 points.
"The gold was the lead today trading at a record high and we saw the gold shares rally very sharply in the last half-an hour," Michael Carlsson, a trader at Consilium Capital said.
The rand was trading at 7.5450 against the dollar at 17:30 SA time, 0.6 percent firmer than Thursday's New York close of 7.59. It briefly hit 7.5055, its firmest level since October 26 on Reuters data.
"Gold is still the driving force at the moment," said a Johannesburg-based currency trader.
The yellow metal raced to a record $1 100.90 per ounce fuelled by a falling dollar in volatile trade sparked by weaker-than-expected US non-farm payrolls data.
"The US payrolls number came out basically mixed ... It's not such a bad figure and the revision was good. We still expect the dollar to come under pressure," the currency trader said.
US employers cut a deeper-than-expected 190 000 jobs in October, driving the unemployment rate to a 26-1/2-year high of 10.2 percent. Job losses for August and September were revised to show 91 000 fewer people lost their jobs.
The rand has gained 20 percent against the dollar so far this year and the central bank and the finance ministry have warned its strength could harm some sectors.
Economic Development Minister Ebrahim Patel said in a written reply to a parliamentary question his department had agreed to hold talks with trade unions and companies to discuss the impact of the strong currency.
The JSE gold index rose 2.8 percent with Anglo Gold rising 3.55 percent to R312.01, while Harmony Gold climbed 2.75 percent to R82.19.
The banking and financial indices lost out on the gains, falling 2.32 percent and 1.5 percent respectively.
First Rand, South Africa's second-biggest banking group dipped 3.25 percent to R16.35, while Standard Bank slipped 2.77 percent to R92.61.
South African insurer Old Mutual lost 2.57 percent to R13.26 and financial holding firm RMB Holdings shed 2.14 percent to R26.47.
"We have still been bearish on banks, Carlsson said.
"I think they still haven't hit their bottoms yet after the huge rally they had over the last few weeks. Although they have been drifting lower we think there's still more downside."
South African government bonds firmed, with market watchers 4CAST saying the market is seeing a fresh wave of buying.
The yield on the 2015 bond fell 6 basis points to 8.3 percent and that on the 2036 note was down 5.5 basis points to 8.585 percent. - Reuters
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