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The stronger rand knocks mining heavyweights back a rung

The stronger rand knocks mining heavyweights back a rung < News < Bet On Markets

Johannesburg — Equities nudged lower yesterday as a central bank decision to keep interest rates on hold pushed the rand higher, knocking heavyweight mining stocks down a rung.

The FTSE/JSE Top40 index shed 0.54 percent to 10 958.12, while the FTSE/JSE Africa all share index slipped 0.48 percent to 12 146.2 points, notching up a second day of losses after a recent rally to historic highs.

The Reserve Bank kept its repo rate steady at 7.5 percent, as expected, saying that generally the inflation outlook was «positive» but there were some concerns.

That pushed the rand up to the day’s best level of R5.82 against the dollar, hurting mining stocks such as AngloGold Ashanti, which lost 1.79 percent to R212.12, and BHP Billiton, which shed 1.17 percent to R63.25.

«The market has been pretty lacklustre. The rate decision pushed us into negative territory, basically as a function of the rand, which strengthened slightly and hurt resource stocks,» said Greg Potter at Nedcor Securities.

Africa’s biggest steel maker, Ispat Iscor, slid 3.6 percent to R60, while industrial group Imperial Holdings dipped 2.53 percent to R97, also due to the stronger rand.

Life insurer Liberty Group fell 1.88 percent to R62.80 despite announcing a forecast of 17.5 percent growth in headline earnings a share if its planned takeover of investment holding firm Capital Alliance succeeds.

Other financial stocks, which have been solid performers in recent sessions, lost some ground, with Nedcor down 1.44 percent at R75.40, Old Mutual off 1.84 percent at R14.42 and investment firm VenFin losing 2.44 percent to end at R23.61.

Edgars Consolidated Stores, whose shops are riding a wave of strong consumer spending, jumped 3.8 percent R275. The stock, which has more than doubled this year, fell sharply recently as investors booked profits.

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