UPDATE 1-South Africa's rand claws back losses; stocks dip on banks

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand claws back losses; stocks dip on banks

* Rand recovers as dollar slump boots EM's

* Government bonds also firmer

* Stocks dip as financials wobble (Adds latest prices, analyst comments)

JOHANNESBURG, Sept 1 (Reuters) - South Africa's rand recouped some of its previous session's losses on Thursday, while stocks closed slightly lower led by a weaker financial sector after asset manager Futurergrowth's decision to freeze lending to state companies.

By 1550 GMT the rand ZAR=D3 had gained 0.4 percent to 14.6600 per dollar, pulling away from its weakest in seven weeks as the greenback stumbled on unexpectedly weak United States factory data. rand traded on the backfoot in early trade but regained forward momentum as investors sought emerging market assets on bets the Federal Reserve could decline to raise rates this year.

"Today should really be a day of consolidation before tomorrows data," said chief currency trader at Standard Bank Warrick Butler, referring to U.S. jobs figures due on Friday.

The rand has fallen nearly 9 percent since Aug. 23 after police issued a summons to Finance Minster Pravin Gordhan over his role in a spy unit in the revenue service. on Wednesday that asset manager Futuregrowth would halt lending to state firms, including power utility Eskom and Transnet, over political ructions in government dragged the rand more than one percent lower. bonds were also firmer, with the yield on the benchmark 2026 paper ZAR186= down 4 basis points to 9.005 percent.

On the bourse, the benchmark Top-40 index .JTOPI dropped 0.2 percent at 46,168 points while the All-Share index .JALSH dipped 0.19 percent to 52,631 points as investors fretted over the brewing political storm.

"The markets are a bit worried that South Africa will be downgraded and that has been reflected in the banking stocks," said director at Sanlam Private Wealth, Greg Katzenellenbogen.

Standard Bank SBKJ.J fell 2.19 percent to 130.23, RMB Holdings RMHJ.J dropped 2 percent to 58 rand, Nedbank NEDJ.J weakened 1 percent to 204 rand and FirstRand FSRJ.J lost 1 percent to 43 rand.

Impala Platinum IMPJ.J bucked the trend, rising 9.53 percent to 62 rand after reporting its annual losses had narrowed.

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