MARKET WRAP: Rand weaker ahead of ANC conference, JSE follows global peers lower

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Currency was under pressure from local factors, while equities contended with the prospect of higher interest rates for longer

The JSE closed sharply lower on Thursday in line with its global counterparts as major central banks delivered their final interest rate decisions for the year.

Andre Cilliers, strategist at TreasuryOne, said the main reasons for the rand’s weakness were local factors, citing the resignation on Wednesday of Eskom CEO Andre de Ruyter and reports that the Gauteng branch of the ANC was split between support for Cyril Ramaphosa and Zweli Mkhize as president of the governing party.

The ECB and BoE moves came after the US Federal Reserve raised rates by 50bps on Wednesday. Data released on Thursday shows US November retail sales fell the most in more than a year. In addition, the labour market remains tight, with the number of Americans filing for unemployment benefits declining last week.

“Safe to say, investors simply didn’t see that coming. Two months of better-than-expected inflation data were enough to convince them that the Fed would not only ease off the brake, but also signal it would do so more in the coming months,” he wrote in a note.Troubled retail holding company Steinhoff recorded its biggest one-day fall ever, plummeting 64.2% to 58c after the company said

 

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