ANGGOLD: 28,857 +233 (+0.81%)
South African stocks dragged to near 2-month low by trade war woes
* Stock touch near 2-month low since June 4
* Trump to impose 10% tariffs on rest of U.S. imports from
* Gold bucks trend on safe-haven asset demand
* Rand reverses earlier gains
By Onke Ngcuka
JOHANNESBURG, Aug 2 (Reuters) - South African stocks slipped
to a near two-month low on Friday as risk aversion swept across
financial markets on resurgent U.S.-China trade tensions, while
the rand also weakened.
Both major stock indexes weakened more than 2% at market
open after U.S. President Donald Trump hit China with a 10%
tariff on the remaining $300 billion of Chinese imports on
Thursday, a day after negotiators from both countries concluded
a meeting in Shanghai without significant signs of
"The negative mood across markets suggests that investors
are jittery over sizzling trade tensions between the world's two
largest economies sabotaging the already fragile global growth
outlook," Lukman Otunuga, a senior research analyst at FXTM said
in a note.
"With China already pledging countermeasures if the U.S.
implements the additional tariffs, things could get really messy
- something that will ultimately cripple risk sentiment even
The Johannesburg Stock Exchange All-Share index
closed 1.66% lower at 56,273 points, while the Top-40 index
ended the day 1.95% down to 50,332 points, after both
weakened to levels last seen on June 4.
Bucking the trend, the Gold index strengthened
5.89% to 2,205 points as investors sought safe-haven assets.
Harmony Gold rose 6% to 38.88 rand, AngloGold Ashanti
gained 7% to 282.48 rand, while Sibanye-Stillwater
climbed 2.42% to 18.64 rand.
"On the gold/rand side these are the best levels that the
market has ever seen. The gold reaction only confirms the
risk-off environment that is in the market at the moment," Andre
Botha, senior dealer at TreasuryONE, said in a note.
On the forex market, by 1538 GMT the rand had
weakened 0.44% against the dollar to 14.7250 from its overnight
close of 14.6600 per dollar.
In early trade it had firmed to 14.5750 as the dollar fell
against most currencies.
Botha said: "The rand is the weakest performing emerging
market currency as it is being used as a proxy due to the ease
of getting in and out of the market."
Bonds also lost some ground throughout the day, with the
yield on the benchmark 10-year government issue down
0.5 basis points to 8.370% after strengthening earlier on.
(Additional reporting by Mfuneko Toyana
Editing by Hugh Lawson and Alison Williams)
First Published: 2019-08-02 13:18:16
Updated 2019-08-02 17:49:08
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