Friday May 22, 05:19 PM
Miners drive S.African stocks up, rand hits 8-mth high
JOHANNESBURG, May 22 (Reuters) - South African stocks bounced back on Friday, propelled by miners as commodity prices jumped, while the rand briefly touched an 8 month high as the dollar fell.
The JSE Top-40 index of blue chips climbed 2.07 percent to 20,310.65 points while the All-share index added 1.86 percent 22,425.54 points.
'We are bucking the trend, European markets are relatively flat, it seems there's definitely buyers at the lower levels to pick up beaten down stock,' said Andrew Todd, a trader at BOE Private Clients.
'The next important level to watch will be 23,000 on the All-share, if we can crack through that, you could possibly see further upside.'
Miners led the rally, tracking firmer commodity prices with bullion climbing to a fresh two-month high as a dollar slide boosted buying of the metal as a currency hedge.
The rand edged firmer but was off the day's high of 8.2063 -- its firmest level since the end of September -- after a earlier rally ran out of steam.
The local currency was trading at 8.2850 against the dollar at 1540 GMT, 0.2 percent stronger than its previous close in New York.
'Generally a quiet day, but in the afternoon we had a sudden rand rally which appeared to be some stop losses being triggered on people who were long dollar-rand,' Citigroup (NYSE: C - news) sub-Saharan Africa specialist Leon Myburgh said.
'(We) saw that sudden spike during the afternoon session but there was no follow-through buying, so it's edged up (rand weaker) again.'
The dollar dropped to its lowest level this year on concerns about the AAA (Xetra: 722800 - news) -rating status of the United States due to its substantial debt, particularly after Britain's outlook was downgraded the previous day.
A rise in U.S. stocks and more upbeat views of the recession-hit global economy also encouraged risk-taking by investors.
Government bonds lost some ground with investors eyeing next week's string of data, including economic growth numbers that are likely to confirm the first recssion in nearly two decades, and inflation.
The central bank will also announce its next move on interest rates, with a Reuters poll showing 16 economists expect a 100 basis point cut on Thursday, but 9 predicting a slowing in the loosening cycle to 50 basis points.
The yield, which moves inversely to the price, was up 0.5 basis points for the session at 8.16 percent, while the 2036 yield added 5 basis points to 8.23 percent.
On the bourse, gold miner Harmony was the biggest gainer, surging 9.41 percent to 97.10 rand. Impala Platinum jumped 7.70 percent to 171.65 rand.
Bourse and mining heavyweight Anglo American (LSE: AAL.L - news) advanced 2.16 percent to 213 rand after brokerage house Nomura said the London-based firm might be vulnerable to a potential takeover from rival Xstrata
Elsewhere, shopping malls owner Liberty International was among the few that weakened, falling 2.29 percent to 47 rand, after announcing share placement results.
Brewer SABMiller eased 1.89 percent to 63.35 rand after broker JP Morgan downgraded the stock to neutral from overweight.
(Reporting by Gordon Bell, Alison Raymond and Tiisetso Motsoeneng; Editing by Ron Askew) (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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