JOHANNESBURG - The rand was softer yesterday, drifting in a narrow band against the dollar as traders held off on large bets and took profit’s after the previous session’s rally to a one-week best.
At 5.45pm, the rand bid at R11.9774 to the dollar, 4.21cents softer than at the same time on Wednesday.
After drawing significant bids on Wednesday when consumer inflation hit a seven-year low, the rand saw interest wane around the R11.9420 point, with investors eyeing further improvements in economic outlook before committing to long positions.
Bonds continued to rally, with yield on the benchmark paper due in 2026 down a further 2 basis points to 8.005percent.
“Due to concerns about rising inflation rates, the rand had depreciated slightly against the dollar ahead of the publication of the March data yesterday (Wednesday), but the losses were immediately retraced,” said currency analyst at German-based Commerzbank, Elisabeth Andreae.
Andreae said wage pressures, rising oil prices and higher electricity prices together with global risks would, however, deter the local central bank from cutting interest rates after it reduced them in March.
Meanwhile, stocks ended down, led by the poor performance of tobacco giant British American Tobacco.
The benchmark JSE Top40 index was down 0.58percent to 50729.19 points, while the broader all share index fell 0.32percent to 57526.79 points.
British American Tobacco retreated 6.85percent at R618.99, tracking its London-listed counterpart.
“The weakness is due to British American tobacco being down, on the back of Phillip Morris’ (BAT’s biggest competitor) poor results. Investors are using that as a proxy and worried about the lack of volume growth,” said Nedbank portfolio manager, Grant Gilbert.
Philip Morris shares fell 5.7percent yesterday after first quarter results were below expectations.
One of the biggest gainers was retailer Pick * Pay Stores, up by 8.9percent to R75, after full-year earnings rose 7.1percent.
Further gains came from the gold stocks which advanced 1.16percent boosted by higher spot gold prices.