South African Stocks Drop in Longest Losing Streak in 16 Months

Stocks in South Africa declined for an eighth day in the longest stretch of losses since February 2014 as the strengthening dollar weighed on commodity prices.

Coal miner Exxaro Resources Ltd., Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. were among the 10 worst performers on the FTSE/JSE Africa All-Share Index, which traded 0.2 percent lower at 52,810.36 by the close on Thursday in Johannesburg. The rand was one of 11 major currencies that weakened against the dollar out of 16 tracked by Bloomberg.

“With a strong dollar you’ll automatically get declining commodity prices,” Rob Pietropaolo, a fund manager at Vunani Private Clients (Pty) Ltd., said by phone from Johannesburg. “With our resource sector being such a heavy component of the index, with declining commodity prices, our miners and our resource stocks are going to bear the brunt of it.”

Equities in Africa’s most-industrialized economy have pulled back from a record high reached on April 24, when its relative-strength index rose to 71.6, above the 70 level that may indicate to some technical traders it’s overbought. The RSI fell to 36.6 on Thursday, the lowest since Dec. 17. The Bloomberg Commodity Index, a gauge of goods from metals to agriculture, retreated 3.7 percent in May.

Exxaro, South Africa’s third-largest coal producer, fell a fifth day, dropping 2.6 percent to 82.86 rand. Sasol Ltd., which makes fuel from coal, retreated 2 percent to 428.91 rand. Kumba declined the first day this week, losing 2.7 percent to trade at 150.82 rand, while Amplats was 0.5 percent down to 291.57 rand.

While an index of six banks fell 0.5 percent, if the rand strengthens against the dollar, “they should ride out the storm a little bit better than anybody else,” said Pietropaolo.

“We’ll close the quarter positive, but the selloff will probably last a couple more days,” he said.

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