JOHANNESBURG: South Africa's rand snapped a six-session losing streak against the dollar on Tuesday, recovering from a hammering at the start of the week triggered by fears about the health of the Chinese economy.
Stocks climbed for the second day, driven by financial and healthcare shares after heavy losses last week. At 1450 GMT, the rand traded 2.02 percent firmer at 16.46 per dollar compared with Monday's close.
The rand slumped to a record low of 17.9950 during Asian trade on Monday on fears that China wanted to weaken its currency aggressively and boost its export competitiveness.
"It's just a little bit of a technical correction," said Bidvest Bank chief dealer Ion de Vleeschauwer.
"Corrections like these are expected because of the lack of liquidity." The local currency was one of the top performing emerging market currencies tracked by Reuters as investors slowly regained their appetite for more riskier assets. But analysts said concerns over monetary and fiscal policy in South Africa could further hurt the rand.
"You have to be very careful in assuming that this is a reversal of the current trend because it's far from it," said de Vleeschauwer. In fixed income, the yield for the benchmark government bond maturing in 2026 shed 1 basis point to 9.675 percent.
It was however still far off the previous session's four-week high of 9.89 percent.
The benchmark Top-40 index ended broadly flat at 43,489.37, while the All-share edged up 0.22 percent to 48,431.34.
"We are seeing some relief come through after the dismal start we had in the first week of trading for the year," said Inkunzi Investments senior trader Petri Redelinghuys.
"The market was smashed so hard into oversold territory since last year and people are possibly buying back their shares."
South Africa's second-largest private hospital firm Netcare and lender FirstRand were the biggest gainers on the bourse.
Shares in Netcare, which runs Britain's largest private hospital network, BMI Healthcare, climbed 4.5 percent to 33.65 rand and FirstRand moved 3.97 percent higher to end at 38.06 rand.
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