JOHANNESBURG: South Africa's rand weakened more than one percent on Monday, giving up its earlier gains as traders bet on a 2015 interest rate hike in the United States while weak growth data in China added to negative sentiment. Stocks ended slightly higher as heavyweight banks such as Standard Bank gained while Shoprite was hammered after the grocer retailer reported slower quarterly sales growth.
By 1533 GMT, the rand was at 13.2650 versus the greenback, down 1.38 percent from Friday's close of 13.0850.
Weak growth data out of China, which dipped below 7 percent for the first time since the 2009 global economic crisis, also put the rand under pressure, as concerns over the world's No. 2 economy soured risk sentiment.
"The US futures for a rate hike moved back almost five points since last week. That shows that interest rates are still a possibility in 2015 and that has had a negative impact on the rand and on the bonds," said Marten Banninga, a trader at World Wide Capital Securities.
Investors will be focusing on South African Finance Minister Nhlanhla Nene on Wednesday, who is expected to target a budget deficit of 3.8 percent of gross domestic product for the 2015/16 fiscal year in his budget.
On the debt market, the yield for debt maturing in 2026 was flat to 8.195 percent.
On the bourse, banks dominated the gainers' list as the recover from recent sharp losses with Standard Bank rebounding 3.45 percent to 147.93 rand and rival FirstRand gained 2.75 percent to 49.99 rand.
But Shoprite fell sharply after the retailer said sales grew 6.7 percent in the three months to the end September, nearly half the growth rate during the same time a year earlier as its mainstay consumer battle job losses in the mining industry.
In reaction, shares in Shoprite dropped 6.3 percent to 148.60 rand, a level last seen nearly a year ago. It was their biggest daily percentage drop in nine years.
"The market is bit concerned about job losses in the mining industry and the their impact on Shoprite core consumer," said Petri Redelinghuys, a trader at Inkunzi Investments.
The blue-chip JSE Top-40 index was up 0.55 percent at 47,720 and the broader All-share index added 0.45 percent at 53,184.
Trade as active with more than 228 million shares changing hands, well above last year's daily average of 183 million shares.
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