(Adds latest prices, analyst quotes)
JOHANNESBURG, April 28 (Reuters) - The South African rand firmed on Tuesday as risk sentiment globally improved, spurred by stimulus measures and talk by leaders around the world about easing lockdown measures.
At 1545 GMT the rand ZAR=D3 was 0.8% firmer at 18.6340 per dollar from an opening level of 18.7750, extending its recent rally to three sessions as investors were soothed by last week's announcement of plans to ease some coronavirus lockdown restrictions in South Africa.
Countries from Italy to New Zealand and Brazil have in recent days announced the easing of coronavirus lockdowns, looking to follow in the footsteps of China which has already embarked on restarting its economy, but with mixed results. global financial markets haven't yet entered a period of sustained risk-on, financial markets tend to lead economic data, and the extreme levels of uncertainty in markets earlier this month and last month seem to have waned," said chief economist at Investec Annabel Bishop.
South African President Cyril Ramaphosa last Thursday announced a phased easing of lockdown restrictions set to begin on May 1, in addition to a 500 billion rand ($26 billion) stimulus package, giving some cheer to investors worried about the economy's recovery prospects. rand's gains, however, were curbed by lingering concerns about South Africa's credit rating after Moody's on Friday warned about ballooning debt and the effectiveness of the stimulus.
"Moody's latest credit rating warning implies a credit rating downgrade will materialise," Bishop said. "South Africa's government bonds exit from the FTSE Russel WGBI at the end of April, that's also weighing on market sentiment for the rand."
Bonds firmed, with the yield on the 2030 bond ZAR2030= down 17.5 basis points to 10.780%.
South African shares rose, helped by gains in retailers' shares on the prospect that easing restrictions will see the return of shoppers to stores that have been empty for five weeks. The JSE Top-40 index .JTOPI climbed 1.11% to 46,100 points, while the broader All-share index .JALSH was up 1% at 50,029 points.
The momentum was slowed by a fall in gold prices, reflected in a 8.8% slide in the bourse's gold index .JGLDX , led by AngloGold Ashanti Ltd ANGJ.J and Gold Fields Ltd GFIJ.J , which were both down nearly 10%.
In response to the easing lockdown measures mining companies in South Africa are setting up shared quarantine facilities for miners testing positive for COVID-19 and are discussing other ways to cooperate. = 18.6544 rand)
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.