Rand, stocks firmer as global risk aversion cools

South Africa‘s rand was firmer on Monday in a broad emerging market rally spurred by a return of risk appetite as political tensions in Italy eased and metal prices climbed.

Stocks also ended higher on improved sentiment to emerging markets with financials leading the way.

At 15:00 GMT the rand was 0.8% firmer at 12.5800 per dollar compared to a close of 12.6925 on Friday in New York.

The greenback’s recent rally was curbed as trade concerns resurfaced after China warned the United States against tariffs, taking the shine off last week’s better-than-expected US jobs data.

Following a prolonged deadlock that saw risk demand slide on fears of a eurozone crisis that would dent global growth, Italy on Friday swore in a new coalition government led by a right-wing party, ushering in some relief for risk assets.

The rand also benefited from higher gold and platinum prices. Spot gold was up 0.2% while platinum climbed 0.6%.

Some short buying ahead of first quarter gross domestic growth figures on Tuesday also pushed the rand near the 12.50 technical resistance level with a retracement back above 13.00 still seen.

A Reuters poll of analysts expects GDP to contract 0.5%.

Bonds were also firmer, with the yield on the benchmark government bond due in 2026 was down 5 basis point at 8.57%.

On the bourse, the Johannesburg Stock Exchange’s Top-40 index closed 1% firmer at 51,405 points, while the broader All-share index was also up 1% at 57,870 points.

Banks led the charge with financials index up 2%. Institutional investment giant Sanlam was 4% on the day to R81,20, followed by Rand Merchant Bank FirstRand and Capitec, which were all up 3% or more.

Mining companies had mixed day in response to improved metal prcies globally. Lonmin was up 2.7% to R7,70. AngloAmerican Platinum was up 1.3% to R350.