UPDATE 1-South Africa's rand soars, stocks at record highs on risk cheer

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand soars, stocks at record highs on risk cheer
Credit: © Reuters.

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JOHANNESBURG, Dec 17 (Reuters) - South Africa's rand stretched its latest winning streak to a fourth consecutive session on Thursday, climbing to a new 10-month best, while the stock market flirted with record highs as hopes for more stimulus in the U.S. boosted risk appetite.

At 1500 GMT the rand ZAR=D3 was 0.94% firmer at 14.6775 per dollar, its firmest level since Jan. 30, bringing gains for the week to nearly 3% in a worldwide high risk rally.

Centre stage in FX markets this week has been occupied by stimulus talks in the United States as well as Brexit negotiations in Europe.

U.S. congressional negotiators are closing in on a $900 billion COVID-19 aid bill, and the Federal Reserve said on Wednesday it would keep funnelling cash into financial markets. that the European Union and Britain may finally reach a post-Brexit trade deal have also upped risk appetite already buoyed by the coronavirus vaccine rollouts.

"Optimism over Stateside fiscal stimulus progress is detracting from the dollar's safe-haven bid, further supporting higher-Beta currencies. These trends are also expected to be sustained in the months ahead," ETM Analytics economists said.

The Johannesburg Stock Exchange (JSE) posted solid broad-based gains with shares across almost all sectors registering a jump.

The benchmark FTSE/JSE all-share index zoomed past the 60,000 mark after gaining 1.79%, ending the day at 60,544.30 - levels last seen in January 2018 when the market touched an all-time high.

The bluechip FTSE/JSE top 40 companies index .JTOPI closed at an all-time peak of 55,484.28 points, a gain of 1.87%.

The rally saw both gold and banking sectors - which usually move inversely to each other - pack gains into their respective indexes. The gold mining index .JGLDX shot up by 5.54% while the banking index .JBANK was up by 0.31%.

The bank index has gained over 60% since its March crash.

The only major outlier was telecom firm MTN Group Ltd MTNJ.J , which lost 7.3% on news that Nigeria's government had asked all telecom service providers there to add valid National Identification Numbers (NIN) to every SIM card registered in the country before the start of next year. bonds, the yield on the long-dated 2030 government bond ZAR2030= fell 5 basis points to 8.715%.

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