Rand slips, stocks higher on coronavirus vaccine hopes

South Africa‘s rand ended the week softer on Friday, backtracking despite glimmers of risk appetite returning to global markets.

At 1500 GMT the rand was 0.33% weaker at R18.92 per dollar, rolling back most of the previous week’s gains and edging toward the R19.00 psychological level that could induce further losses.

The unit was roiled by a surprise lending rate cut by the local central bank on Tuesday and little sign that government was ready to open the fiscal stimulus taps to slow an economic contraction seen topping 6% this year.

Investors betting on a reversal of the recent greenback rally versus the rand, especially with the United States spending trillions to tackle what is set to be its deepest recession yet, were this week spooked by the South African currency’s failure to break key technical levels near R18.20.

News of US President Donald Trump’s plans to reopen the world’s largest economy also fed bids back into the dollar and dampened risk demand.

Government bonds were firmer, with the yield on the 2030 bond down 11 basis points at 10.350%.

Stocks rose along with global markets after reports that patients with severe COVID-19 symptoms had responded positively to a drug made by a US company.

The Johannesburg Stock Exchange’s Top 40 index rose 1.96% to close at 45,044 points, while the All-Share index advanced 1.84% to 49,135 points.

Banking shares gained 1.91% while the mining sector closed up 2.97%.