Risk aversion weighs on S.Africa rand, stocks down

JOHANNESBURG (Reuters) - South Africa's rand fell sharply against the dollar on Thursday as investors' appetite for risk waned on worries that the global economy will remain weak for some time, while stocks fell on lower commodity prices.

The JSE's Top-40 index of blue chips fell 2.69 percent to 19,919.35 points and the broader All-share index retreated 2.36 percent to 22,174.13 points.

"Commodity prices are lower across the board because of the stronger dollar and worse-than expected employment data out of the U.S. ... It's a poor start to the third quarter," one Johannesburg trader said.

The rand was trading at 7.84 against the dollar at 1535 GMT, 1.27 percent weaker than Wednesday's New York close of 7.7415.

"We have seen the rand weaken quite a bit today. We've seen poor data out of the U.S. and that brought out more risk aversion," said a currency dealer.

A larger-than-expected drop in U.S. non-farm payrolls raised concerns about the pace of economic recovery and sent investors back to safe haven assets.

The rand weakened after hitting a 10-month high of 7.67 on Tuesday. It was trading at 10.96 against the euro after hitting a 17-month high of 10.7391 on Tuesday.

South African government bonds also weakened sharply as investors unwound their long positions, after Finance Minister Pravin Gordhan warned on Wednesday revenue collected would undershoot the target and borrowings would increase.

The yield on the 2015 bond jumped 8 basis points to 8.775 percent and that on the long-dated 2036 note surged 15.5 basis points to 8.965 percent on the day.