UPDATE 1-South Africa's rand, stocks gain on vaccine cheer

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand, stocks gain on vaccine cheer
Credit: © Reuters.

(Adds latest prices, analyst comments)

JOHANNESBURG, Dec 3 (Reuters) - South Africa's rand gained on Thursday, boosted by optimism about COVID-19 vaccines that have whetted risk appetite among global investors hungry for yield.

At 1700 GMT the rand ZAR=D3 was 0.62% firmer at 15.1900 per dollar, a one-week best. It slid to a low of 15.4300 in the previous session in erratic trade as investors looked to gauge the impact of the vaccines given weak fundamentals.

Britain on Wednesday approved Pfizer (NYSE: PFE )'s PFE.N COVID-19 vaccine, raising hopes that the tide could begin to turn against a virus that has killed nearly 1.5 million people globally. rand has been steadily appreciating against the U.S. dollar over the last few months with its attractive carry, high yielding sovereign bonds and correlation to global risk sentiment," said Warren Venketas, currency analyst at IG.

"These factors have overshadowed South Africa's dim economic growth prospects and political instability."

Africa's most developed economy, already in recession before the pandemic struck, was among the hardest hit by the coronavirus-related lockdowns.

"The distribution of effective COVID-19 vaccines is likely to be much slower in Africa than in many other parts of the world and the "vaccine bounce" in domestic economic activity will probably also be more muted," said Jason Tuvey, emerging markets analyst at Capital Economics.

On the bourse, equities rose for a third consecutive session as improved risk sentiment boosted global stocks on news that a vaccine for COVID-19 was imminent. Johannesburg benchmark all-share index .JALSH rose 1.14% to end at 58,947 points, reaching its highest level in more than 11 months, while the bluechip index of top-40 companies .JTOPI closed up 1.36% at 54,172 points, a level last seen in 2018.

Platinum miners, Impala Platinum IMPJ.J gained 3.82% and Northam Platinum NHMJ.J rose 2.72% on the back of a firmer platinum price XPT= .

Gains, however, were curbed as gold mining stocks .JGLDX fell 2.95% with bullion producer Harmony Gold HARJ.J closing down 3.96% to 66.18 rand.

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