South Africa's rand, stocks and government bonds weakened on Friday as investors fled to safe-haven assets such as the US dollar amid rising tensions in the Middle East.
The conflict between the US-Israel and Iran has entered its seventh day but shows no signs of slowing down as Israel on Friday launched heavy strikes on Hezbollah-controlled areas of Beirut, attacking infrastructure in Tehran, while Iran attacked parts of Tel Aviv.
At 1347 GMT the rand traded at 16.72 against the dollar, 0.4% weaker than Thursday's close, in line with most emerging market peers.
The greenback was up about 0.2% against a basket of currencies.
“Like many emerging market currencies, the rand is under pressure due to rising global risk appetite and higher oil prices, which is particularly negative for South Africa as a net energy importer,” said Andre Cilliers, currency strategist at TreasuryOne.
Cilliers said the local unit could trade in a range of 16.40 to 16.75 per dollar in the near term as markets await further clarity on both the geopolitical situation and US economic data.
The top-40 index on the Johannesburg Stock Exchange was down 2%.
South Africa's benchmark 2035 government bond weakened sharply, with the yield rising 19.5 basis points to 8.435%.
Next week, domestically focused investors will look to GDP results, mining and manufacturing data released by the country's statistics agency for clues on the health of the continent's most industrialized economy.
Source: reuters