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South Africa's rand recovers as dollar weakens; stocks up

(Updates prices)

JOHANNESBURG, Aug 24 (Reuters) - South Africa's rand firmed on Friday as the dollar fell, regaining poise after a sharp dip in the previous session after U.S. President Donald Trump's tweet about land reform in Africa's most industrialised economy.

Stocks rose amid broad gains led by market heavyweight Naspers.

On Thursday Trump said on Twitter he had asked Secretary of State Mike Pompeo to study South African "land and farm seizures" and the "killing of farmers", pushing the rand back towards 14.5000 versus dollar following four consecutive sessions of gains.

At 1501 GMT the rand was one percent firmer at 14.2450 per dollar, after earlier hitting a session best of 14.1800.

"The rand recovery has not been in isolation but rather in line with that of its emerging market peers on the back of a weakening U.S. dollar," IG South Africa senior market analyst Shaun Murison said.

"Discourse between U.S. President Donald Trump and the Federal Reserve has provided some of the short term volatility to the dollar."

Fed Chair Jerome Powell said on Friday steady interest rate hikes are the best way to protect the U.S. economic recovery and keep job growth as strong as possible and inflation under control, just days after Trump criticized the central bank's rate hikes.

Government bonds also firmed, with the yield on the benchmark paper due in 2026 down 4.5 basis points to 8.9 percent.

On the bourse, the blue chip top 40 index rose 1.17 percent to 52,742 points while the all-share index closed 1.02 percent stronger at 58,798 points.

Naspers closed 2.82 percent higher at 3,538 rand on the back of improved sentiment after its annual general meeting on Friday.

"Koos Bekker was talking this morning and all over sudden it started to move up. We haven't seen the minutes from the meeting but obviously the market liked what he had to say," said Ryan Woods, market trader at Independent Securities referring to Naspers' chairman.

Further gains were seen in the bullion sector, with Gold Fields up 3.67 percent to 35.60 rand and Harmony Gold rose 3.33 percent to 22.65 rand, on the back of a stronger gold price. (Reporting by Olivia Kumwenda-Mtambo and Patricia Aruo Editing by James Macharia)

2018-08-24 17:38:27

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