Wednesday February 18, 04:15 PM
S.Africa's rand firmer against dollar, stocks slip
JOHANNESBURG, Feb 18 (Reuters) - South Africa's rand firmed as much as 1.5 percent against the dollar on Wednesday but later retreated in line with Wall Street over worries about a global recession, while local stocks were lower for a sixth
day.
Johannesburg's Top-40 index of blue chips shed 0.39 percent at 17,968.97 points, dragged by falls in heavyweights Anglo American (LSE: AAL.L - news) and BHP Billiton (LSE: BLT.L - news) . The broader All-share index lost 0.45 percent at 19,953.32 points.
'We're suffering a bit of whiplash at the moment. I think everyone's watching this breakdown on the U.S. indices,' said one Johannesburg-based trader.
Equity markets worldwide slumped on further worries about the deteriorating global economy on the day, and U.S. markets, which opened positive, slid on worries about the severity of a recession.
At 1546 GMT the rand traded just 0.4 percent firmer against the greenback at 10.2410 compared with Tuesday's close at 10.2825, but was off a session high of 10.1220 reached earlier.
'It sounds like there was some good two way flow in the interbank market today. There is lots of nervousness around emerging market currencies, particularly East European currencies at the moment (but) the rand held up relatively well,' said Leon Myburgh, sub-saharan Africa specialist at Citigroup (NYSE: C - news) .
'I think we did see some of the currencies make a come-back during the course of the day but it does not seem to have had a material impact on South Africa.'
The rand took its cue in later trading mainly from trading partner currency the euro, which fell to a nearly 3-month low against the dollar as U.S. stocks reversed earlier gains following poor U.S. housing starts and building permits data for January.
Emerging market currencies like the rand have taken the brunt of investors' flight from risk amid a global financial crisis that has left major economies grappling with recession.
On the local bourse, mining giant BHP Billiton fell 2.41 percent to 165.90 rand and Anglo American slid 2.03 percent to 175.49 rand.
AngloGold Ashanti (Brussels: ANG.BR - news) was 1.53 percent lower at 314.99 rand after mining group Anglo American Plc cut its stake in the firm further.
Most financial shares were higher, with Investec Ltd up 4.60 percent at 33.68 rand and Absa rising 3.33 percent to 93 rand.
'The banks have been quite severely sold down in the last few days and maybe you are seeing some interest coming in at the lower levels, a bit of bargain hunting,' a trader said.
Anglo Platinum (Frankfurt: A0D965 - news) starred amongst the local stocks, gaining 6.13 percent at 450 rand. Africa's biggest supermarket Shoprite also rose 1.60 percent to 50.70 rand after posting half-year profit at the top end of its forecast.
South African government bonds also weakened on Wednesday, pushing yields higher. The yield on the 2015 bond added 1 basis point to 8.185 percent, and that on the 2036 bond 3.5 basis points to 8.42 percent.
(Reporting by Zimkhitha Sulelo and Serena Chaudhry; Editing by Victoria Main) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com) Keywords: MARKETS SAFRICA/CLOSE
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