By TJ Strydom and Mfuneko Toyana
PRETORIA (Reuters) - South African President Jacob Zuma on Wednesday dropped his court bid to delay the release of a report over alleged influence peddling in government as thousands marched in the capital Pretoria against the president.
The rand strengthened more than 1 percent and bonds firmed in response to the news of the withdrawal, which analysts said was an indication the country still had strong institutions.
The release of the report by the Public Protector, a constitutionally mandated anti-graft official, was suspended on Oct. 14 after Zuma's application to the High Court. The hearing, which started on Tuesday, was due to continue on Wednesday.
Thousands of people gathered at various points in the city. Some carried "Zuma must go" placards outside the court that was to decide on Zuma's bid to delay the report on allegations of political influence by his wealthy friends.
"My instructions are to withdraw the application and to tender costs," Advocate Anthea Platt, without giving reasons. Zuma's spokesman did not answer phone calls, email or text messages for comment.
Protesters also demanded that state prosecutor Shaun Abrahams be removed from office. Abrahams had pressed charges of fraud against Finance Minister Pravin Gordhan, but then dropped them on Monday after popular support from both the political and corporate realms for Gordhan.
Supporters of Gordhan and sympathetic financial analysts say all the charges could be a ploy by Zuma and his allies to discredit a finance minister who stood in the way of their securing access to lucrative government contracts. The president has denied that he is in conflict with Gordhan.
Since taking office in 2009, Zuma, 74, has survived several corruption scandals almost unscathed, with the backing of top echelons of the ruling African National Congress (ANC).
But South Africa has had to bear the cost as the economy has stagnated and investors worry about its political stability, business climate and rule of law.
"This means Zuma must now step down," said Azaria Khambani, 33, a security guard taking part in the protests when he heard that Zuma had withdrawn the court challenge.
Jay Jacobs, 40, who also works in the security industry, said: "We will not leave Pretoria until Zuma goes. He must take the Guptas with him to jail."
Brothers Ajay, Atul and Rajesh Gupta, who are close friends of Zuma and run businesses ranging from media to mining, are the subject of the report by the then Public Protector on allegations that they influenced the appointment of ministers.
Zuma has denied granting them undue influence and they have denied seeking it.