JOHANNESBURG, Jan 3 () - The South African rand had recovered losses by the end of the day on Thursday after a sharp selloff in emerging market currencies on rising concerns about global growth.
Traders said the rand recovered as selling was considered to have been excessive and investors still see value at around 14.60 to the dollar.
AT 1516 GMT the rand was 0.02 percent firmer at 14.4657 per dollar after tumbling to as far as 14.8975, its weakest in three months.
The rand was already on the backfoot following weak factory data from China on Wednesday.
A scramble to safe-haven currencies such as the Japanese yen caused what some traders called a "flash crash" in world markets as stop-losses and automated orders were triggered in low-liquidity conditions.
At one stage the rand was down about 4 percent against the yen, which is seen as a safe asset in times of volatility.
"It did seem like a knee-jerk reaction and now you see things have stabilised, but it shows you just how sensitive the rand is to bad news, especially if it is about Chinese growth," Andre Botha, currency dealer at TreasuryOne, said.
Political uncertainty ahead of national elections in May is set to leave the rand vulnerable in the longer term and more susceptible to sharp, sentiment-driven outflows, analysts said.
Bonds also gained, with the yield on the benchmark 2026 paper falling 8 basis points to 8.855 percent.
Stocks were also recovering on Thursday after seeing their largest single-day drop since August the day before. The Johannesburg Stock Exchange's top-40 index was up 0.52 percent at 1500 GMT and the broader all-share index was 0.63 percent higher.
Metals and mining companies were among the biggest winners of the day, with the South African unit of steel manufacturer ArcelorMittal rising almost 10 percent and gold companies, including Harmony Gold and AngloGold Ashanti continuing to benefit from the retreat to safe haven assets.
Telecoms giants MTN and Vodacom joined only a handful of falling stocks on the top-40 index, down 0.7 percent and 0.14 percent at 1514 GMT respectively.