South Africa's rand gains as dollar falters, stocks flat

JOHANNESBURG: South Africa's rand gained on Tuesday as broad dollar weakness supported investor appetite for riskier assets after Washington imposed additional tariffs on Chinese imports and Beijing retaliated, escalating a trade dispute between the world's two largest economies.

Stocks ended flat, weighed down by market heavyweight Naspers.

At 1520 GMT, the rand traded at 14.8300 per dollar, 0.65 percent stronger than its close on Monday.

Trade-war tensions intensified after U.S. President Donald Trump imposed additional 10 percent tariffs on about $200 billion worth of Chinese imports on Monday. In retaliation, China said on Tuesday it will levy tariffs on about $60 billion worth of U.S. goods.

"It seems markets are not responding positively to the developments on the trade front and that seems to kind of weigh on the dollar, which has created some scope for emerging markets to gain a little bit," said Halen Bothma, an analyst at ETM Analytics.

"(Locally) the market is focused on what is happening tomorrow and Thursday in terms of the latest inflation numbers and how that will prepare the market going to the Reserve Bank monetary policy committee decision."

August consumer price inflation data is due out at 0800 GMT on Wednesday, while the central bank will announce its interest rates decision on Thursday.

All but one of the economists polled by Reuters last week predicted that the central bank would leave its main lending rate at 6.5 percent, as it weighs economic weakness against a pickup in inflation.

In fixed income, the yield on the benchmark government paper due in 2026 ended 4 basis points lower at 9.21 percent, reflecting firmer bond prices.

On the bourse, the broader all share index was up 0.15 percent at 56,381 points while the blue chip Top-40 index  was largely unchanged at 50,220 points.

Shares in Naspers fell 0.83 percent to 1,654 rand ($111.52).

The technology firm unveiled plans on Monday to spin off and list separately its pay-TV unit in a move aimed at narrowing a discount between its market value and the value of its stake in Chinese Tencent.

"The shares did have an initial spike yesterday but the jury is still out about how unbundling MultiChoice is really going to help the discount situation," said Greg Davies, equities trader at Cratos Capital.

"If this is the first step towards closing that discount then the markets will reward that but at the moment it is not  enough."