South African rand recovers after soft CPI, EM rebound; shares up
* Rand rallies, aided by EM relief, slightly softer CPI
* Stocks, bonds lifted by firmer currency as banks shine
(Adds latest prices)
JOHANNESBURG, June 20 (Reuters) - South Africa's rand
rallied on Wednesday inflation fell more than expected and a
recovery among emerging-market currencies spurred some
At 1540 GMT the rand was 0.93 percent firmer at
13.6150 per dollar, pulling away from the 14.00 mark that
traders said would trigger deeper losses, after a month in which
the currency lost 8 percent.
"We were expecting this kind of correction. It's a technical
pullback and we've also seen other emerging-market currencies
stabilise," said currency strategist at Nedbank Mehul Daya.
"We don't, however, see this as a trend change. There's just
a little bit more calm out there and the softer inflation
numbers have contributed a little bit to that," Daya said.
Headline consumer inflation slowed to 4.4 percent
year-on-year in May from 4.5 percent in April. It slowed to 0.2
percent from 0.8 percent month on month.
The dollar was down 0.2 percent, providing some
respite for emerging-market currencies that have been battered
by worries about a growing U.S.-China trade spat. Investors
short the rand pocketed profits after it fell to near
Traders expect the rand to settle near its 13.50 technical
support toward the end of the week, with current account data
due on Thursday and the unfolding trade war the main risk
The firmer rand aided a recovery in fixed assets and
The yield on the benchmark government bond due in 2026
was down 17 basis points to 9 percent.
The Johannesburg Top-40 stock index rose 0.75
percent to 50,396 points and the broader All-Share index
0.71 percent to 56,651 points as the rand rebounded.
Financials were in demand with the banking index
up 2.17 percent. Rand Merchant Bank gained 3.4 percent
at 71.89 rand and FirstRand Bank Group rose 3.7 percent
at 59.00 rand.
Heavyweight Naspers lifted the market by 2.2
percent to 3280.64 rand.
One of the biggest decliners was telecoms giant Vodacom
Group, which fell 1.73 percent at 127.75 rand after
Morgan Stanley cut its target price to 149 rand from 173 rand.
Mining companies had a mixed day. Harmony Gold was
up 1.23 percent to 21.40 rand while Impala Platinum Holdings
was down 4.42 percent to 20.76 rand.
(Reporting by Mfuneko Toyana and Nomvelo Chalumbira, editing by
First Published: 2018-06-20 08:54:34
Updated 2018-06-20 18:03:02
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