JOHANNESBURG: South Africa's rand gained more than 1 percent on Thursday, stretching a recent recovery into a second consecutive session after weak US retail sales data boosted investor appetite for high-yielding emerging market assets.
Stocks fell after mining companies came under pressure as gold and platinum prices weakened.
By 1600 GMT the rand had strengthened 0.98 percent to 14.1820 per dollar, pulling back slightly from 14.1020, its firmest level since Sept. 9.
US retail sales fell more than expected in August, tilting investor sentiment in favour of high-yielding, high-risk assets as the likelihood of an interest rate hike next week by the Federal Reserve diminished.
The rand has struggled for direction recently due to political tensions at home and doubts over the direction of interest rates globally. But it now looks set to test technical resistance around 14.1000 in search of further gains.
"Rand volatility finally seems to be easing off," currency strategist at Rand Merchant Bank John Cairns said in a note. "A lack of event risk argues for ranges remaining constrained for the rest of the week, but the nervousness in global markets is still high and risks spilling over at any stage," Cairns said.
On the stock market, the benchmark Top-40 index fell 0.59 percent to 45,713 points, while the All-Share index dropped 0.62 percent to 52,174 points.
Spot gold fell 1 percent to a two-week low on Thursday, while platinum slipped 0.1 percent ahead of next week's Fed policy meeting, as increased risk appetite drove investors into equities.
"Global markets are up, so guys might have rotated out of gold into equities", portfolio manager at Standard Bank Stockbroking Martin Strauss said. Bullion miners Sibanye Gold Limited fell 2.67 percent to 50.68 rand, Harmony Gold Mining Company Limited dropped 2.24 percent to 49.86 rand, AngloGold Ashanti Limited weakened to 2.16 percent to 221.83 rand and platinum producer Lonmin PLC fell 3.08 percent to 35.20 rand.
On the bond market, government bonds were firmer, with benchmark issue due in 2026 cutting 1 basis point to 8.685 percent.
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