File image: The Johannesburg Stock Exchange. (File picture: Siphiwe Sibeko).
JOHANNESBURG - The rand was weaker in late afternoon trade yesterday after the dollar firmed to a five-month high as worries about a US-China trade war eased.

The relief lifted sentiment on industrial metal mining companies, helping the benchmark stock index notch up modest gains.

At 5pm, the rand bid at R12.7936 against the greenback, 5.90cents softer than at the same time on Friday.

The dollar hit a fresh five-month high on US Treasury Secretary Steven Mnuchin’s declaration the feared US-China trade war was “on hold” following their agreement to suspend the tariff threats.

The stronger dollar also weakened South African bonds, sending yields on the benchmark 2026 note 5 basis points higher to 8.67percent.

“We see a steady decline in South African bonds which are being sold off at the moment, with people rushing back to US yields,” said Wichard Cilliers, currency dealer at TreasuryONE.

“It is all to do with the dollar and emerging markets under pressure. I don’t think it will have a long-term impact at this stage,” Cilliers said.

On the bourse, the blue chip JSE Top40 index edged up 0.04percent to 51310.87 points and the broader all share index was 0.03percent in the black at 57821.2 points.

Boosted by higher prices for metals such as copper, which rose to a one-week high, mining heavyweights Anglo American and BHP Billiton both gained nearly 2percent to R326.30 and R303.28, respectively.

Meanwhile, European shares rose yesterday as easing trade war worries lifted the dollar, supporting exporters, while Italian stocks came under renewed pressure as markets awaited developments in the creation of a new government.

The pan-European STOXX600 index closed up 0.3percent, holding at its highest level since the beginning of February, while the FTSE100 hit a new record high, up 1percent as strength in the dollar supported the internationally-exposed index.

“The feel-good factor from the trade war truce bolstered risk sentiment and a weaker pound delivered the usual shot of adrenalin for the blue chips,” said Neil Wilson, chief market analyst at Markets.com.

- REUTERS