The rand was set for a loss of around 1% against the dollar this week, as a manufacturing survey suggested that the economy was not yet firing on all cylinders under President Cyril Ramaphosa.
The rand traded mostly in positive territory in a volatile session on Friday, but it could not make up for losses earlier in the week that were linked to disappointing economic data and concerns over US trade policy.
Stocks rose, lifted by gains for bourse heavyweight Naspers and ArcelorMittal’s South Africa unit.
At 1545 GMT the South African currency was trading at 12.64 to the dollar, up 0.4% on the day but down 1.1% since the end of last week.
Purchasing Managers’ Index data released on Friday showed that conditions in South Africa’s manufacturing sector deteriorated slightly last month.
That added to evidence that the economic rebound under Ramaphosa – who replaced scandal-plagued Jacob Zuma in February – remains fragile. On Thursday data showed South Africa’s trade balance for the year swung to a deficit compared with a surplus last year.
“The ‘Ramaphoria’ effect is waning and dark clouds in the form of trade protectionism have started to form,” NKC Research economists said in a note, referring to investor optimism surrounding Ramaphosa’s election as president.
They said the weaker PMI reading in May could be linked to the US rejection of South Africa’s application for an exemption from import tariffs.
South Africa’s benchmark Top 40 equities index added 2.2% to 50 875 points, while the wider All Share Index climbed 2.0% to 57 282 points.
Among the best-performing stocks, ArcelorMittal’s South Africa unit gained over 11%, extending a surge from earlier in the week when it announced the sale of its stake in trading and shipping company MIHBV. Internet and entertainment group Naspers closed more than 5% higher.
Metair fell more than 3% after it offered to buy Slovenian car battery maker Tovarna Akumulatorskih Baterij (TAB) in a $350 million (R4 billion) deal.