JOHANNESBURG: The rand retreated on Tuesday with a recent rally running out of steam as the currency failed to break a signficant technical resistance level and despite favourable risk conditions globally due to an anticipated delay to US interest rate hikes.
Stocks were fractionally higher, with a share buy-back in South Africa-based investment company, Brait, offsetting the impact of a slump in gold mining group AngloGold Ashanti shares on news of a stake sale.
By 1520 GMT the rand had weakened 0.34 percent to 13.3375 per dollar compared to close of 13.2920 in New York, slightly shy of 13.2000 where it also turned around last week.
The rand reached a session best early on of 13.2075 after dovish comments from a Federal Reserve policymaker hit the dollar, with investors paring bets on an increase to lending rates by the end of the year.
The rand however gave back the early gains, failing to hold on to a breach of technical resistance at 13.2000 where it succumbed to a minor selloff as traders booked recent profits.
"The rand is sitting in no man's land at the moment so it's been really hard to call whether its going up or down. And trade has been really liquid, that's why you're seeing some of these massive swings," Capilis Asset Management trader Giacomo Bonavera said.
On the stock market, the benchmark Top-40 index ticked up 0.2 percent to 45,392 points while the All-Share index was flat at 52,396 points. Brait rose 3.16 percent to 115.59 rand after saying it will buy back 100 million euros worth of ordinary shares over the next 12 months.
"The market views that as positive where companies are buying their own shares back they see that as a strength indicator and that it is doing well in its space," Independent Securities trader Ryan Woods said.
Overall gains were curbed by a 6.07 percent fall in AngloGold Ashanti shares which extended losses from the previous session to hit 266.24 rand after Paulson & Co cut its stake. Government bond yields on the benchmark paper due in 2026 rose half a basis point to 8.435 percent.
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