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Picture: 123RF/chipus
Picture: 123RF/chipus

The rand depreciated the most in more than two months on Tuesday and the JSE joined weaker global peers — pushed lower by mining companies — as further evidence of a struggling Chinese economy sparked risk-off sentiment.

The local currency added to Monday’s losses, weakening as much as 2.71% to R18.3376/$ after manufacturing activity in China swung to contraction in July. The Caixin manufacturing PMI fell to 49.2 versus market forecasts of 50.3 and down from the previous month’s 50.5.

“The rand lost ground as the dollar climbed to its highest level in three weeks, and China’s economic woes raised global growth concerns once again and dampened risk appetite,” said TreasuryONE currency strategist Andre Cilliers.

“Monday’s [local] below-expectations trade balance number also impacted negatively on the local currency.”

At 7.17pm, the rand had weakened 2.66% to R18.3188/$, 2.47% to R20.0979/€ and 2.18%% to R23.3741/£. The euro was 0.21% weaker at $1.0973.

The JSE all share lost 0.43% to 78,641.91 points and the top 40 0.47%. Precious metals plunged 5.14%, resources 2.3%, and retailers 2.27%. Still, SA listed property added 1.19%, food producers 0.71% and industrials 0.46%.

AngloGold Ashanti led the losses in the precious metals sector, falling 7.37% to R365.52 — the most since March 9 2022. Gold Fields was down 6.37% to R257.40, Sibanye-Stillwater 6.12% to R31.75, Harmony 2.81% to R74.79, Northam Platinum 2.51% to R147.30 and Impala Platinum 2.34% to R125.98.

Investors’ focus this week will be mainly on US non-farm payrolls data, which is due on Friday. The resilience of the US labour market remains a key factor when evaluating US inflation and monetary policy outlook.

Investors are also digesting corporate results amid a week that will be headlined by Apple and Amazon earnings on Thursday.

“Financial markets have shown resilience in recent weeks, with investors more cautious and attentive to new information,” RMB analysts said in a note on Tuesday. “The upcoming US July jobs report on Friday may be crucial in assessing the impact of higher borrowing costs on the labour market.

At 7.07pm, the Dow Jones industrial average was less than 0.1% weaker at 35,582.57 points, and the broader S&P 500 was down 0.25%. In Europe, the FTSE 100 closed 0.43% lower, while France’s CAC 40 and Germany’s DAX fell 1.22% and 1.26%.

Gold eased 1.07% to $1,942.93/oz and platinum 1.91% to $930.89/oz. Brent crude was 0.41% weaker at $84.88 a barrel.

tsobol@businesslive.co.za

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