South Africa's rand at a record low, stocks rebound

JOHANNESBURG: South Africa's rand hit a record low against a strong dollar on Monday as the first U.S. Federal Reserve rate hike in nearly a decade looms, while stocks rose, ending a four-day losing run.

At 1739 GMT the rand was at 14.54 against the greenback, down 1.18 percent from Friday's close at 14.3710. The local currency had earlier hit a new record low of 14.5675.

Government bonds weakened across the curve, with the yield for the benchmark instrument maturing in 2026 climbing 1.5 basis points to 8.77 percent, a level last seen in February 2014.

The dollar recovered more ground after last week's losses against the euro, strengthened by jobs data on Friday that bolstered the case for a rise in U.S. interest rates next week.

"A key driver of weakness in emerging market currencies over the past quarters has been this dollar boom market that we're in and we expect that dollar boom market to still have some room to run and that factors into a bearish view on the rand," said ETM Analytics market analysts Jana van Deventer.

Stocks raced higher, tracking strong gains in major overseas markets with furniture group Steinhoff among the top gainers.

Steinhoff, which moved its primary listing to Frankfurt on Monday, added 2.86 percent to 79.20 rand, rebounding from sharp losses on Friday after the company said its offices in Germany were raided by tax authorities.

But Chief Executive Markus Jooste told Reuters the tax probe would have no material impact on the group and that his company had appointed lawyers to deal with the matter.

Overall, investors took their cue from higher global equity markets, unmoved by Friday's rating downgrade from Fitch as heavily weighted stocks such Steinhoff, Naspers and SABMiller earn the bulk their profits overseas.

The blue-chip JSE Top-40 index gained 1.24 percent to 44,898.69 and the broader All-share index added 1.17 percent at 49,860.

The biggest drag on the blue-chip index was Sasol, dropping 1.5 percent at 369.73 rand as the price of crude oil fell to its lowest in almost seven years.

Sasol makes fuel from gas and coal but sells it at the same price as companies that import and refine crude oil.

Trade was active with more than 240 million shares changing hands, well above last year's daily average of 183 million shares.