JOHANNESBURG, Nov 26, Reuters -- The South African randAfrican rand fell below 16.00 to the dollar for the first time this year, with investors unnerved by the discovery of a coronavirus variant in the country, government bonds and shares also fell.
As Britain and some other countries restricted travel to South Africa and its neighbours, the stock declines were caused by a drop in hospitality shares.
Britain said that because of mutations, the virus variant was considered by scientists to be the most significant one yet found.
Risk-off trade as new COVID 19 variant in South Africa could be the Grinch that steals Christmas, analysts at ETM Analytics said in a note.
The possibility of a new variant will severely diminish the resilience of the ZAR against the USD move, as it was already to the topside for the USD due to positioning for more aggressive Federal Reserve monetary tightening in the months ahead. The rand was trading at 16.2200 against the dollar at the time of 0725 GMT, which is 1.52% less than its previous close.
The yield on the benchmark for 2030 jumped 24.5 basis points to 9.97% in fixed income.
South African scientists said on Thursday they had detected a new 19 variant that had a very unusual constellation of mutations, which were concerning because they could help it evade the immune response and make it more transmissible.
In early trade, both the Top 40 index and the broader all-share were down nearly 2%.
City Lodge Hotels, down 20%, was leading the losses.
The Sun International ownership of casinos and hotels, including the Sun City Resort, fell nearly 14%, while the shares of Tsogo Sun Hotels fell more than 11%.