Tuesday , February 7 2023

South African ranks fall after the rate decision; stocks down



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The turn fell Thursday after the dollar after the central bank left interest rates unchanged and called less hawkish, citing an improved inflationary outlook.

Stocks closed down below, driven by a decline in retail after weak sales sales from Mr. Price, Woolworths and Truworths.

At 1522 GMT, the range was traded at R13.80 per dollar, 0.77% weaker than at the end of R13.69 on Wednesday. He hit a low session of R13.83 and a maximum of R13.65.

The Central Bank of South Africa kept the benchmark reference rate unchanged at 6.75%, as expected, saying it saw an improvement in inflation prospects.

Analysts said the BNR's inflationary outlook cut the likelihood of rising future interest rates, putting pressure on the turn.

"The steep movement of South African politicians from their previous rhetoric suggests that further rate hikes are now unlikely," said John Ashbourne, chief economist at emerging markets at Capital Economics. "If anything, the today's speech raises the possibility that cutting will come sooner."

In fixed income, the benchmark government bond yield due in 2026 brought 2 basis points to 8.8%.

On the stock market, the Top 40 index fell by 0.88% to 47,298. The broader stock index fell 0.65% to 53,436.

Mister. Price dropped on the blue-chip index, down 16.69% to R215.60 after reporting a slowdown in sales growth, and warned of a last challenging quarter.

Shares in Woolworths fell nearly 10 percent to R49.44. The store operator announced a slower half-year sales growth and said it expects its main earnings to drop by 5% during this period.

Truworths also suffered heavy losses, down more than 9 percent to R80.70, after declaring it is likely to see a decline in earnings in the first half of the month.

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