South African rand and stocks rally after Fed reassurance



JOHANNESBURG, July 29 (Reuters) - South Africa's rand and stocks rallied on Thursday, after the U.S. Federal Reserve's reassurance that interest rate hikes remain distant.

Assets in Africa's most industrialised economy are highly susceptible to swings in sentiment on global markets.

At 1600 GMT, the rand ZAR= traded at 14.5550 against the dollar, around 1.1% firmer than its previous close and mirroring gains elsewhere in emerging markets.

Fed Chairman Jerome Powell in a news conference overnight took a dovish stance, saying the U.S. job market still had "some ground to cover" before it would be time to pull back emergency economic support measures.

Riskier currencies like the rand thrive on U.S. interest rates remaining low because they benefit from the interest rate differential that increases their appeal for carry trade.

In equities, the all-share index .JALSH on the Johannesburg Stock Exchange (JSE) jumped to its best-ever close, boosted by strong results from mining companies and upbeat trading in global shares.

A further recovery for technology investor Naspers NPNJn.J and its subsidiary Prosus PRXJn.J after a recent rout also pulled the market higher.

The all-share index closed up 1.52% at 69,565 points and the Top-40 index .JTOPI up 1.65% at 63,395 points.

London and Johannesburg-listed Anglo American AAL.L AGLJ.J saw a jump of around 5% as bumper commodity prices lifted first-half profits to their highest ever.

Naspers and Prosus both gained around 4%.

Government bonds also firmed, with the yield on the benchmark 2030 instrument ZAR2030= down 5 basis points to 8.875%.


Reporting by Alexander Winning and Promit Mukherjee; Editing by Lisa Shumaker

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.