January 15, 2020 / 4:25 PM / a month ago

UPDATE 1-South Africa's rand firms on better-than-expected retail sales data

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JOHANNESBURG, Jan 15 (Reuters) - South Africa’s rand firmed against the dollar on Wednesday as November retail sales rose more than expected, giving insight into how the economy performed in the final quarter of last year.

Retail sales rose 2.6% year-on-year in November, as Black Friday discounts lured price-sensitive consumers into stores, data showed on Wednesday.

“Today’s figures will boost fourth quarter growth figures as household spending accounts for about 60% of GDP,” economists at Nedbank Group Economic Unit wrote in a note.

They cautioned though that strong retail sales growth is not expected to be sustained in the coming months as household spending will be contained by subdued consumer income growth and a deterioration in consumer confidence.

The rand traded at 14.3950 per dollar at 1554 GMT, 0.11% firmer than its previous close.

The market will now turn its focus on the initial trade deal which U.S. President Donald Trump and Chinese Vice Premier Liu He were due to sign at the White House at 1630 GMT.

In fixed income, the yield on the benchmark government bond was flat at 8.26%.

In the equities market, stocks rose, boosted by gains from retailers and gold. The Johannesburg All-Share index closed 0.17% firmer at 58,063 points, while the Top-40 index rose 0.21% to 51,835 points.

The general retail index climbed 0.66%, buoyed by gains in drugstore Clicks, up 2.81%, clothing and homeware retailer TFG, up 1.86% and supermarket chain Spar group, up 1.74%, on the back of stronger than expected November retail sales.

Gold stocks benefited from higher prices, which rose on renewed worries about U.S.-China relations ahead of the signing of an initial trade deal.

Sibanye-Stillwater climbed 2.99%, while Royal Bafokeng Platinum rose 2.19% on the back of higher platinum prices. (Reporting by Nqobile Dludla; editing by Jonathan Oatis)

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