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South Africa's rand firms on renewed risk appetite

(Updates prices)

JOHANNESBURG, March 12 (Reuters) - South Africa's rand firmed on Tuesday, supported by renewed risk appetite after potential progress on Brexit in Britain and as the dollar weakened after U.S. consumer price data.

Stocks also gained alongside emerging-market rivals, with drugmaker Aspen Pharmacare leading the gainers as it clawed back gains after a sell-off last week.

At 1501 GMT, the rand traded at 14.2975 per dollar, 0.33 percent firmer than its New York close on Monday.

Risk appetite was boosted after Brussels agreed to last-minute changes to an updated Brexit deal with British Prime Minister Theresa May on Monday night, raising hopes the government would secure a deal before the Brexit deadline in less than three weeks.

But Britain's Attorney General Geoffrey Cox said the Brexit backstop remained unchanged despite assurances from the European Union, reigniting worries that the latest tweaks would not be enough to woo rebellious British lawmakers who have threatened to vote down May's plan again on Tuesday evening.

"The markets are likely to continue trading with a somewhat cautious bias as they await the outcome of the vote in the UK," Nedbank analysts said in a note.

"The rand has traded steadily firmer after the high print on Friday as risk assets have found support. The next technical support in the rand is towards the 14.2000 level," they added.

Dollar weakness after U.S. consumer prices showed that inflation remains low despite a tight labour market, bolstering the Federal Reserve's case for keeping interest rates on hold, also helped the rand.

In fixed income, the yield on the benchmark bond due in 2026 added 1 basis point to 8.675 percent.

On the stock market, the Johannesburg All-Share index rose 0.21 percent to 55,699 points, while the Top-40 index firmed 0.16 percent to 49,468 points.

"Our market is soaring higher today, along with the rest of the globe," portfolio managers at Vestact said in a note.

Multi-national drugmaker Aspen led the gainers following a sell-off on Friday, when the company lost almost a third of its value on concerns about ballooning debt. It rose 10.28 percent to 113.03 rand.

The financials index moved higher, boosted by solid results from the country's oldest bank FirstRand, which reported a 6.1 percent rise in half-year headline earnings, outperforming rivals in retail banking.

FirstRand climbed 2.04 percent to 63.39 rand.

Builder Group Five applied for the suspension of trading in its shares after it filed for bankruptcy protection on Tuesday as lenders pulled funding, threatening the collapse of one of the biggest names in the local construction industry and more than 8,000 jobs.

(Reporting by Olivia Kumwenda-Mtambo and Nqobile Dludla. Editing by Jane Merriman)

2019-03-12 18:48:50

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