(Reuters) -South Africa’s rand strengthened on Wednesday as a weaker U.S. dollar lent support even as concerns about weak global growth weighed on markets.
At 1559 GMT, the rand traded at 15.2650 against the dollar, 0.59% stronger than its previous close. Earlier in the day, the currency had weakened over 0.5%.
The dollar index was down 0.1% against its rivals.
A weaker dollar can make high-yielding but riskier assets such as the rand relatively attractive to investors.
The rand took in its stride a survey showing the country’s business confidence dipped in the second quarter as ongoing supply chain shortages worsened sentiment in the manufacturing and auto sectors.
Analysts have said the high inflation rate and rising wages are likely to slow the South African economy.
“Slowing global growth, particularly in 2023 on the lagged effects of higher interest rates, is expected to impact SA’s performance,” Investec economist Annabel Bishop said in a research note.
The stocks in the Johannesburg Stock Exchange (JSE) opened strong, but slipped as investors raised their bets on ECB rate hikes and worried about recession.
However, tech stocks performed well, with the market heavyweights Naspers and Prosus ending up 8.91% and 6.81% respectively, as China’s Tencent Holdings hit a more than two-month high on the release of a new game amid hopes of China easing crackdown on its tech giants.
Naspers has a majority stake in Prosus, which in turn holds about 29% in Tencent.
Overall on the JSE, the All-Share index fell 0.52% to 69,950 points while the Top-40 index closed 0.45% lower at 63,449 points.
The government’s benchmark 2030 bond was slightly higher, with the yield down 2 points at 9.945%.
(Reporting by Anait Miridzhanian in Gdansk and Bhargav Acharya in Bengaluru; Editing by Toby Chopra and Barbara Lewis)
