South African stocks fell by more than 2 percent on Friday as investors priced in a possible downgrade from ratings agencies, while the rand rallied as the greenback failed to make meaningful gains. Standard & Poor's kept South Africa's credit rating at BBB- on Friday but changed its outlook to negative from stable, saying this reflected the view that economic growth might be lower than expected.
Fitch, which was due to issue its rating statement later, rates South Africa at "BBB" with a negative outlook and warned of a possible downgrade in September. On the forex market, the rand inched up, having fallen briefly to 14.3500 to the dollar after S&P's outlook downgrade.
By 1704 GMT the rand was at 14.3300 against the greenback, 0.24 percent up Thursday's close of 14.3645. The dollar was nearly flat against the euro despite stronger-than-expected US monthly jobs data, as markets continued to digest Thursday's unexpectedly small stimulus from the European Central Bank. The benchmark Top-40 index slipped 2.26 percent to 44,347 points while the broader All-Share index fell by the same margin to 49,284 points.
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