JOHANNESBURG (Reuters) -South Africa’s stocks jumped on Tuesday while the rand slipped after a decision by major oil producers to reduce supply on Sunday, which triggered concerns about a slowdown in global economic growth.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, announced they would reduce their oil supply by about 1.16 million barrels per day.
“The production cut announcement by OPEC+ has brought back inflation and recessionary fears into the market, leaving risk sensitive currencies like the rand exposed,” IG analyst Warren Venketas told Reuters, adding the weaker rand contributed to the strength of the local bourse.
Both the blue-chip Top 40 index and the benchmark all-share index closed more than 1% higher, led by a gain of almost 1.6% in the resources index.
“Mining companies … surged towards the latter end of the trading day,” Venketas said.
At 1559 GMT, the rand was down 0.76% at 17.9450 against the dollar.
The government’s benchmark 2030 bond was weaker, with the yield up 1.5 basis points to 9.88%.
(Reporting by Tannur Anders and Bhargav AcharyaEditing by Anait Miridzhanian and Mark Potter)
