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The rand fell by 2.6 percent on Wednesday, reaching R16/$ as investors fled. The rand was last trading at R15.93, its lowest level in nearly a week. It was also worth R18.03 per euro and R21.44 per pound.
While the JSE’s All-Share Index gained nearly 1%, miners such as AngloGold, Harmony, and Gold Fields lost around 2% as the gold price fell 1%. Stock markets around the world mostly fell Wednesday as a “Santa Claus rally” showed signs of exhaustion amid lingering concerns about the Omicron variant and uncertainty about economic prospects for 2022. Covid- 19 cases have been reported around the world, prompting governments to enact new measures to limit the spread of the virus, while the travel industry has seen thousands of flight cancellations.
Oil prices fell on Wednesday, while the dollar remained stable against major rivals. The World Health Organization’s warning that the risk from the variant is still “very high” has added to the sense that the pandemic is far from over, though data showing a lower risk of hospitalization has lifted spirits. “With market activity much reduced for the holiday season, investors continue to tentatively price in a global recovery hitting a minor bump, and not a pothole,” noted Jeffrey Halley, senior market analyst at OANDA trading group.
Tokyo closed lower in thin holiday trade on Wednesday, reflecting the uncertainty, with the market weighed down by US futures losses. However, London rose in midday trade as the FTSE 100 index resumed trading after a long holiday weekend. On Tuesday, UK traders were catching up with gains in eurozone indices.
Analysts attribute the drop in China’s main stock index to losses for major liquor brands, including Kweichow Moutai, one of the world’s largest drinks companies. Expectations that the country’s central bank will increase stimulus in 2022 provided some relief.