Stocks Drop on Weak Rand
April 26, 2011
The All Share Index tumbled 75 to 6616, fueled by losses on the All Gold Index, which fell 25 to 1778, and the Industrial Index, which stumbled 69 to 7853. Trading was robust, with volume rising to 452 million rand worth of shares. The fragile rand slid to a three-and-a-half month low against the dollar Wednesday, pressured by losses in the local bond market and the reserve bank's failure to support the currency. In late European trading, the dollar was quoted at 4.5535 rand, off slightly off its session high of 4.5600 rand but up from late Tuesday's settlement at 4.5350 rand. Rumors about rising domestic interest rates faded Wednesday, and with them went the market's buying interest in the rand. The government's lack of intervention in the currency markets worried investors, who have complained that the government has done little or nothing to arrest the currency's recent slide, traders said. Blue chips were among the heaviest losers, with diamond behemoth De Beers Consolidated Mines giving back all Tuesday's strong gains; its shares ended down 3.75 rand at 131.25. Elsewhere, mining and investment house Anglovaal dropped 4.50 rand to 134.50, while construction group Murray & Roberts tumbled 50 cents to a new 2011 low of 15 rand. Classic rand hedge stocks, whose earnings are largely denominated in foreign currencies, managed to hold steady at Tuesday's levels. Swiss-based tobacco and luxury goods concern Richemont ended flat at 69.75 rand on volume of 266,000 shares. Gold shares, which normally climb when the dollar rises at the expense of the rand, ended the day with sharp losses. Traders said the weak bullion price and lack of overseas buying interest depressed the sector. Spot gold fell below $387 an ounce for the first time in almost two weeks, sending top producer Free State Consolidated Gold Mines down 1.75 rand to 47. Hartebeestfontein Gold Mining dropped 60 cents to 13.75 rand.
VastPress 2011 Vastopolis
