JOHANNESBURG: South Africa's rand firmed on Tuesday, by as much as 1-1/2 percent at one stage, after data showing China's economy grew at its weakest pace in nearly seven years fuelled hopes that Beijing would unleash more stimulus policies.
South African stocks snapped four straight days of losses, buoyed by the hopes of fiscal stimulus in China, which cheered emerging markets across the board.
At 1530 GMT the rand had firmed 0.55 percent to 16.7450 per dollar, pulling back slightly after rallying as far 16.5750 earlier in the session.
In the absence of local data South African markets, like fellow emerging economies reliant on exporting to China, fed off growing expectations that more monetary easing measures were imminent from the world's no.2 economy.
Ricardo Da Camara, market analyst at ETM Analytics, said China's stimulus measures have been one of the "key risk topics on everybody's radar" as investors fret over the health of Beijing's economy.
South African government bonds strengthened alongside the rand, with the yield on the benchmark 2026 issue shedding 8.5 basis points to 9.75 percent.
"There's quite a lot of demand in the longer end. And with the average inflation closer to 6 percent, the longer-dated bonds should be the ones in demand, especially at these higher yields," said head of bond trading at WWC Securities Marten Banninga.
Statistics South Africa publishes December consumer inflation data at 0800 GMT on Wednesday, with a Reuters poll of economists predicting year-on-year prices rising to 5.2 percent from 4.8 percent in the previous month.
On the local bourse the blue-chip Top-40 index added 1.85 percent to 42,872 while the wider All-share index rose 1.60 percent to 47,627.
Anglo American Platinum lead the way, zipping up over 6 percent to 190.17 rand after spot platinum climbed 1.7 percent to $832.32, recovering from a seven-year low of $812.95 in the previous session.
It was also lifted by news that Sibanye Gold's shareholders had overwhelmingly approved of its acquisition of Amplats' labour-intensive Rustenburg operations, which were the epicentre of a five-month strike in 2014.
Stocks were also boosted by technical factors after momentum indicators suggested the main indices were oversold.
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