The rand broke a three-day winning streak on Monday, while leisure-focused stocks, retailers and banks led losses on the JSE, as SA moved back to alert level 4 lockdown.
On Sunday evening President Cyril Ramaphosa announced SA would move to the stricter restrictions until July 11, as the country grapples with a third wave of the Covid-19 pandemic that threatens to be worse than the first two combined.
The rand led losses among its emerging-market peers, weakening about 1% in intraday trade as the move to level 4 and slow vaccination programme threaten the outlook for economic recovery.
“SA has failed in preventing the third wave by gaining insufficient traction on vaccinations. SA’s economy will consequently suffer on tighter restrictions, as will livelihoods, while lives are increasingly being lost as the pandemic reaches into SA firms. With little change in the will of the government to massively boost private sector participation, it would be difficult to prevent a likely fourth wave down the line,” said Investec chief analyst Annabel Bishop.
“This also continues to subdue investor confidence in SA, particularly in Gauteng as the latest business confidence readings show. There is likely little to drive a strengthening rand trend from here and we continue to expect further weakness instead,” said Bishop.
At 6.15pm, the rand had weakened 0.6% to R14.2196/$, 0.6% to R16.9676/€ and 0.87% to R19.7529/£. The euro was unchanged at $1.1932.
Shares in JSE-listed leisure and entertainment stocks slumped on Monday, with the new restrictions likely to have a deleterious effect on their businesses.
Tsogo Hotels lost the most in three months on Monday, down 8.9% to R2.66. Tsogo Gaming fell 9.83% to R7.80, the biggest loss since late December 2020, also while the country was experiencing firmer lockdown measures.
Sun International slumped 8.39% to R18.24 and City Lodge 6.7% to R3.48.
The JSE lost 0.61% to 65,809 points and the top 40 0.53%. The travel & leisure index fell the most since March 30 2020, just after SA went into its first hard lockdown, plunging 7.53%. Retailers dropped 2.75%, banks 2.72% and financials 2.24%.
Massmart led the losses in its sector, falling the most since early December 2020, down 5.26% to R61.58. Truworths relinquished 5.07% to R53.31 and Steinhoff 4.55% to R1.89.
Among banks FirstRand lost the most in a week, down 3.47% to R51.50. Absa fell 2.83% to R131.65, Standard Bank 2.81% to R124.06 and Capitec 1.33% to R1,646.
Gold was little changed at $1,780.02/oz, while platinum lost 1.67% to $1,096.82. Brent crude was 0.9% weaker at $74.90 a barrel.
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