September 16, 2011 / 4:43 PM / in 6 years

S.Africa's rand weaker vs dollar, stocks at two-wk high

JOHANNESBURG (Reuters) - South Africa’s rand ended the week on a bearish note on Friday, but bonds recovered somewhat after a sharp sell-off seen as overdone earlier in the week.

A bank teller looks at South African rand note, October 1, 2003.

Domestic stocks inched to their highest close in two weeks, rising 0.13 percent as gains in Harmony Gold and other miners offset a downturn in banks.

Trade was subdued ahead of the weekend and after the settlement of September index futures on Thursday.

While investors remain skittish on concerns about the euro zone debt crisis, signals of support for Greece this week helped South African stocks make up for some of their recent steep losses.

That trend could continue next week, said Menelaos Hatziandreou, a trader at BP Bernstein.

“People are still very cautious but I expect a bit of a rally in the next few sessions because the guys want to create new positions after the futures close-out yesterday,” he said.

The rand was trading at 7.43 against the dollar at 1545 GMT, 0.5 percent weaker than Thursday.

“There’s still a lot of nervousness in the market and guys are not taking new positions. Exporter interest at 7.45 and importer interest at 7.38/40 has kept it within a range,” said Ion de Vleeschauwer, chief dealer at Bidvest Bank.

The rand fell to 7.4825 on Thursday, flirting with this year’s low of 7.50. The two attempts to break 7.50 have some dealers betting the rand might go back to the 7.30’s but trading has been highly volatile.

IFR, a Thomson Reuters markets and analysis service, said there was scope for the rand to retest 7.50.

GOLD SHARES UP, BANKS DOWN

On the bourse, the Top-40 index of blue chips edged up 0.13 percent to 27,726.22, its highest finish since Sept 1.

The broader All-share index added 0.17 percent to 31,051,35.

Gold miners were lifted after the precious metal bounced back from a two-week low. Harmony Gold, the world’s fifth-largest producer of the precious metal, rose 4.1 percent to 96.80 rand.

AngloGold Ashanti, the world’s third-largest gold producer, gained 2 percent.

But banks were weaker, giving up their gains from the previous session. Standard Bank, Africa’s largest lender by assets, fell 2.1 percent to 96.68 rand.

Trade was relatively subdued, with 231 million shares changing hands, according to the latest data available from the exchange.

The 200-day simple moving average of volume on the Johannesburg exchange is around 242 million share a day.

A total of 148 shares gained, 119 declined and 67 were unchanged.

Next week, traders will be focusing on the Reserve Bank rates decision on Thursday and CPI inflation data on Wednesday.

Yields were off multi-week lows, with the 2015 yield down three basis points to 6.78 percent and that on the 2026 note steady at 8.20 percent.

Should the central bank next week sound even more pessimistic about local growth, bonds may gain more as the market braces for another rate cut.

Analysts in a Reuters poll said the FRA market -- which sees a 50 percent rate cut chance -- has run ahead of itself and rates will stay flat next week and way into next year.

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