South Africa's rand recovers after sell-off, stocks slide

JOHANNESBURG: South Africa's rand recovered some losses on Tuesday as the tide of risk aversion that saw the currency plunge in the previous session ebbed, while stocks continued their losing streak.

At 1615 GMT the rand was 0.21% firmer at 16.7450 per dollar, after tumbling more than 3% on Monday, the most among emerging market currencies, as the threat of new pandemic-related lockdowns in the United Kingdom and other countries in Europe prompted concerns about the global recovery.

"The recent price fluctuations within the USD/ZAR pair shows how sensitive the ZAR has been along with other emerging market currencies are to global risk sentiment," Warren Venketas, analyst at IG, said in a note.

"If the continued ZAR strength ensues, the 16.5500 support zone becomes of interest. Today has already seen a test of this support area. Any break below could result in the 16.5000 horizontal level being the next area of support. A lot is dependent on global risk appetite."

Bonds weakened with the yield on benchmark 2030 government paper up 10 basis points to 9.415%.

The Johannesburg Stock Exchange (JSE) continued its losing streak, its sixth day in a row, with both the benchmark and the bluechip indices hovering around three-month lows.

The FTSE/JSE all share index was down 0.1% on Tuesday to end the day at 53,265 points while the FTSE/JSE top 40 companies index closed down 0.05% to end at 49,126 points.

The fall was largely led by mining companies, though banks, often known to be well capitalised, bucked the trend with the banking index rising 1.06%.