June 7, 2018 / 2:29 PM / a year ago

UPDATE 2-South African rand, bonds at 5-month low in panic sell; shares up

* Rand hit by investors fleeing EMs

* Steinhoff tops gainers

* Metal prices support gold stocks (Adds latest numbers, analyst comments, details)

JOHANNESBURG, June 7 (Reuters) - South Africa’s rand sunk to its weakest level in more than five months on Thursday as sentiment toward the currency was soured by a combination of poor economic growth and investors fleeing emerging markets.

Struggling retailer Steinhoff was a top performer on the bourse, rising more than ten percent after announcing it had obtained creditor support.

At 1530 GMT the rand was 1.53 percent weaker at 12.9100 per dollar, losing most of that ground as New York traders came online and offloaded their risk holdings as turbulence in other emerging markets and weak growth locally led to some feverish selling.

“We’ve seen some panic selling as the rand went past 12.85. A couple of stops were triggered and now its momentum trading. It’s nothing to do with South Africa’s fundamentals, it’s a global EM sentiment thing,” said fixed-income specialist at Rand Merchant Bank Michelle Wohlberg.

The yield on the benchmark 2026 bond was down 3 basis points to 8.82 percent.

Traders noted that Brazil’s real was pounded in early trade, dragging other emerging currencies down with it. The real was down was down 1.2 percent to a new 2-year low.

“In this last move we’ve seen a lot of aggressive offshore buyers. We are not sure if there’s a large flow behind it. We’ve also seen the Brazilian currency weakening significantly, and other EM’s seem to be following suit,” said senior trader at Standard Bank Oliver Alwar.

A fall in U.S. weekly jobless claims also put pressure on the rand, which is still reeling from Tuesday surprise 2.2 percent contraction in first quart GDP.

April manufacturing data on the day was mixed, shrinking on monthly basis but up slightly annually.

“The rand’s still suffering from spillover effects from Tuesday’s GDP numbers. People are worried and aren’t convinced about the direction of the rand and the economy long-term,” said currency trader at TreasuryOne Wichard Cilliers.

The break of the 12.85 support line saw momentum indicators tilt to overbought levels, likely to spur a push to the psychologically crucial 13.00 mark.

On the bourse, stocks ended firmer with the Johannesburg Stock Exchange’s Top-40 index closing 0.58 percent higher to 52,037 points, while the broader All-share index climbed 0.53 percent to 28,391 points.

Steinhoff’s shares rose after the company said it had obtained creditor support letters for two companies it used to finance its overseas business. It’s stock closed 11.40 percent stronger to 1.27 rand.

Commodity stocks were also among the top gainers on higher metal prices. Mining company Sibanye-Stillwater gained 4.81 percent to 9.16 rand and while Gold Fields rose 2.22 percent to 47.03 rand. (Reporting by Mfuneko Toyana and Nomvelo Chalumbira Editing by James Macharia)

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