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Johannesburg - The firm rand, which on Friday morning again traded at the strongest level in 52 weeks against the dollar, put a cap on share prices on the JSE.
The local market, which rose on Thursday when the Resources index gained strongly after the dollar lost ground against most currencies, was therefore moderately lower by midday on Friday.
Besides the strong rand, which is normally negative for the dual-listed shares on the JSE, investors in resources shares also sought more evidence of a sustainable economic recovery, particularly in China which is the biggest consumer of South African commodities.
The losses were however modest as most emerging markets will end the week in the black after the Federal Reserve said this week that monetary policy in the United States will only be tightened gradually. The market expected and discounted a far more rapid tightening of the monetary screws and the dollar dropped sharply on the Fed’s announcement, which supported commodity prices.
The rand also firmed against the dollar, like other emerging market currencies, and the local unit at mid-morning traded at R12.74 to the dollar, the highest in more than a year.
A strong rand is however negative for dual-listed shares as local stocks are more expensive in rand for foreign investors. The dual-listed shares, which earn much of their income abroad, also earn less in rand if the currency is strong.
The local market was therefore in limbo with all the major indices only moderately lower. The All-share index traded 0.27% softer at 52 608 points and the Top 40 index was 0.34% lower at 45 371 points. The Resources index was only 0.15% higher, while the Gold index was 0.71% lower after a strong run on Thursday.
The Industrial index was 0.49% lower, while financial shares lost 0.36%.
The prices of the top shares also moved very little, with Naspers [JSE:NPN] only 0.01% higher at R2 215.20 and British American Tobacco [JSE:BTI] unchanged at R809.57.
Remgro [JSE:REM] was however 2.29% softer at R219.84 and MTN [JSE:MTN] dropped 1.28% to R127.99.
Among the commodity giants Anglo American [JSE:AGL] gained only 0.9% to R205.31, and Glencore [JSE:GLN] was 1.19% stronger at R54.28.
Impala Platinum [JSE:IMP] was one the best performers, gaining 3.94% to R44.36 and Kumba [JSE:KIO] was 2.03% higher at R220.39.
Sanlam [JSE:SLM] traded at a new 52-week high of R73.42 in the financial sector, 1.76% up on the previous day’s high of R72.15, but Old Mutual [JSE:OML] gained only 0.11% to R35.14.
