UPDATE 1-South African rand gains as Biden's advance lifts risk appetite

  • Reuters
  • Forex News
UPDATE 1-South African rand gains as Biden's advance lifts risk appetite
Credit: © Reuters.

(Updates rand, bonds; adds stocks)

JOHANNESBURG, Nov 24 (Reuters) - South Africa's rand gained on Tuesday as appetite for riskier assets grew after U.S. President Donald Trump accepted the transition to a Joe Biden presidency.

The rand is seen by some investors as a proxy for emerging- market risk and tends to gain strongly when global market sentiment is upbeat.

At 1524 GMT, the rand ZAR=D3 traded at 15.3250 versus the U.S. dollar, 0.7% stronger than its previous close.

Trump acknowledged the head of the General Services Administration should go ahead with a transition to a government led by President-elect Biden, despite plans to continue with legal challenges. Capital said in a research note that the global backdrop was favourable for the rand, but that any further recovery would likely be gradual and slower.

"We are neutrally positioned on the U.S. dollar at the moment, and we will probably look to increase our exposure to the greenback should the rand move into the high-R14s against the dollar," it said.

Government bonds gained, with the yield on the 2030 instrument ZAR2030= down 1.5 basis points to 8.885%.

Shares on the Johannesburg Stock Exchange (JSE) ended stronger on Tuesday, tracking global markets, which were up on Biden's move towards Presidency and vaccine hopes as AstraZeneca also reported success to its trials.

The benchmark all-share index .JALSH closed up 1.08% to 57,762 points. The blue-chip top 40 companies index .JTOPI ended 1.09% higher to 53,049 points.

The rise in stocks was largely universal, with banks taking the lead once again -- the bank index .JBANK was up 3.59%. Sasol Ltd SOLJ.J was up almost 15% after the company said it was selling 50% stake in its Texas petrochemicals plant for $404 million. gold stocks fell heavily after gold prices dropped to a four-month low as vaccine hopes shifted investors to riskier assets. gold index .JGLDX plunged by 5.88%.

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