UPDATE 1-South Africa's rand extends recovery, stocks slide

(Adds latest prices, analyst comments)

JOHANNESBURG, March 10 (Reuters) - South Africa's rand firmed on Wednesday, extending gains from the previous session as appetite for higher yielding currencies improved.

At 1530 GMT, the rand ZAR=D3 was 0.83% firmer at 15.1725 per dollar, moving further from Monday's low of 15.5700 as a spike in U.S. Treasury yields stabilised.

A broad emerging market sell-off at the beginning of the week sparked by rising U.S. yields hit the currency hard.

Some investors fear higher bond yields and a faster economic recovery in the U.S. could lead the Federal Reserve to cut short its quantitative easing program and allow lending rates to rise, weakening demand for riskier high yielding currencies like the rand.

"In view of the fragile domestic economy, which was already in recession before the outbreak of the pandemic, we continue to see only limited ZAR recovery potential," said Elisabeth Andreae, currency analyst at Germany's Commerzbank (DE: CBKG ).

"The rand should benefit above all from the postponement of Fed tapering expectations, which we expect to bring about a slight improvement in the environment for EM currencies."

In fixed income, the yield on the benchmark long-dated South African government bond due in 2030 ZAR2030= was down 1 basis point at 9.45%.

Stocks closed slightly lower, with the Johannesburg Stock Exchange's benchmark Top-40 Index .JTOPI falling 0.34% to 62,886 points and the broader All-Share Index .JALSH dipping 0.2% to 68,517 points.

Financial stocks, and others that tend to benefit from a stronger rand, enjoyed a boost, however, led by insurer Old Mutual (LON: OMU ) OMUJ.J which closed 3.4% higher on the blue-chip index.

At the other end of the scale were gold miners, who suffered as the price of the precious metal came under pressure from the higher Treasury yields and a stronger dollar. GFIJ.J was the biggest loser, closing 7% lower and bringing to an end an around 20% climb since the start of March.