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Cape Town - The JSE closed firmer on Wednesday, as the weaker rand buoyed rand hedge stocks on the local bourse.
Following Tuesday's decline, the rand weakened further on Wednesday, mainly on the back of US dollar strength. The local currency weakened to an intra-day low of R13.60/$, which was good news for rand hedge stocks such as Richemont [JSE:CFR] and British American Tobacco [JSE:BTI], which closed the day up 1.68% and 1.97% respectively.
Other major gainers included Anglo American [JSE:AGL] which gained 3.02% and Telkom [JSE:TKG], which recovered slightly from Tuesday's big drop to gain 5.08%.
Gold miners were among the biggest losers with Harmony Gold [JSE:HAR] and Gold Fields [JSE:GFI] shedding 2.18% and 0.05% respectively. African Rainbow Minerals [JSE:ARI] lost 4.69%, whilst Sibanye-Stillwater [JSE:SGL] continued on a downwards trend as it closed 2.58% lower.
Retailers, Truworths [JSE:TRU] and Shoprite [JSE:SHP] lost 1.81% and 0.83% respectively.
Financial shares were not spared as First Rand [JSE:FSR] and Barclays Africa [JSE:BGA] lost 1.38% and 0.64%.
The blue chip JSE Top-40 index managed to close up 0.41%, while the JSE All-share index gained 0.26%. The Industrials index gained 0.27% while the Resources index jumped 1.10%.
The weaker rand however weighed down on the Financials index, as it lost 0.32%.
Strong greenbacks
The strength in the US dollar came as a result of US Federal Reserve Chair Janet Yellen’s comments on Tuesday night on the Fed’s hawkishness, and the increasing likelihood of a December interest rate hike. The US dollar also strengthened due to President Donald Trump’s tax plan.
The US dollar was firmer against major currency pairs as indicated by the US Dollar Index, which climbed up to intra-day highs of 93.607 index points.
Gold weakened on the back of US dollar strength to reach an intra-day low of $1 282.61/oz.
The US dollar did, however, ease slightly from its strong rally which resulted in gold rebounding marginally. It was recorded at $1 286.99/oz just after the JSE closed.
Brent Crude eased marginally on Wednesday. Despite a draw in US Crude Inventories the commodity failed to gain any significant upside immediately thereafter.
The sentiment on Brent Crude is relatively bullish at the moment, and this should ease OPEC’s concerns of subdued oil prices that have prevailed over the past year. The commodity was trading at $57.88 per barrel just after the JSE closed.
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