UPDATE 1-South Africa's rand recovers, stocks rise

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand recovers, stocks rise
Credit: © Reuters.

(Updates rand , bonds; adds stocks)

JOHANNESBURG, March 29 (Reuters) - South Africa's rand firmed on Monday, reversing early losses alongside other emerging market currencies as an improving U.S. economic outlook lifted demand for the dollar.

At 1502 GMT the rand ZAR=D3 was 0.15% firmer at 14.9675 against the dollar.

"The domestic currency will remain erratic, swinging rapidly both stronger and weaker, as global market events continue to impact its direction," said chief economist at Investec, Annabel Bishop, adding the volatility was likely to persist in the second quarter.

High-yielding currencies in the developing world have come under pressure this month from rising U.S. bond yields, which have surged on expectations of higher inflation and have pushed up demand for the dollar.

On the domestic front, investors remain wary of slow progress in the rollout of COVID-19 vaccine heading into the second quarter of the year, as a resurgence in infections would impact the anticipated economic recovery.

Stocks surged on Monday extending a massive gain seen on Friday as hopes of a faster local economic recovery added on to positive global cues.

The benchmark all-share index .JALSH was up 0.38% to 67,089 points at day's close and the bluechip index JSE top 40 .JTOPI ended up 0.33% to 61,444 points.

The economy-sensitive banks rose with the bank index .JBANK up 3.18%, hinting that investors are happy to bet on local economy picking up that rising cases of coronavirus globally and slow pace of vaccination in the country.

Index heavyweight and Africa's biggest company in terms of market capitalisation Naspers Ltd NPNJn.J closed up 0.38% boosted by positive Chinese industrial output data.

Naspers, through its subsidiary Prosus NV PRX.AS PRXJn.J , holds over 30% stake in Chinese tech giant Tencent Holdings 0700.HK .

Bonds firmed, with the yield on the benchmark 2030 ZAR2030= paper down 3.5 basis points to 9.45%.

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