World Markets

South Africa's rand firmer as risk takers return, stocks up 3.29%

Credit: REUTERS/THOMAS WHITE

South Africa's rand powered to its firmest in almost a week on Monday, climbing down from an all-time low as some investors banked profits while risk sentiment was cheered by signs the spread of the novel coronavirus was easing.

Adds details on rand, local stock market

JOHANNESBURG, April 6 (Reuters) - South Africa's rand powered to its firmest in almost a week on Monday, climbing down from an all-time low as some investors banked profits while risk sentiment was cheered by signs the spread of the novel coronavirus was easing.

At 1500 GMT the rand ZAR=D3 was 1.84% firmer at 18.7000 per dollar, having kicked-off the session at 19.0900 and looking poised for further falls after Fitch slashed the country's debt deeper into sub-investment-grade late on Friday.

The Johannesburg Stock Exchange's Top-40 index .JTOPI rose 3.63% to 42,356.59 points and the All-Share index .JALSH climbed 3.29% to 46,066.94 points.

"Markets are continuing to rebound from oversold levels," said Shaun Murison, a senior analyst at IG Markets.

"The dollar has reversed earlier gains and we're seeing a recovery in EM currencies. The rand is coming from severely depressed levels with the suggestion that perhaps it is undervalued at current levels," said Murison.

The currency crashed to an all-time low of 19.3590 between late Friday and early Monday as the shock of the second ratings downgrade in as many weeks rippled through markets, but saw some strong bids late in the session as investors eyed high-yielders.

Risk sentiment was soothed by signs that the spread of the novel coronavirus in the United States and Europe could be tapering.

France's daily death toll fell in the past 24 hours, Italy reported its lowest daily COVID-19 death toll for more than two weeks and Spain’s pace of new deaths slowed.

Bonds also firmed, with the yield on the benchmark issue due in 2030 ZAR2030= down 12 basis points to 11.315%.

The central bank said on Monday growth in 2020 could contract by as much 4 much due to the coronavirus lockdown.

(Reporting by Mfuneko Toyana and Promit Mukherjee, editing by Larry King and Catherine Evans)

((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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