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S.Africa rand strengthens against dollar, stocks up

Published 12/28/2009, 11:22 AM
Updated 12/28/2009, 11:24 AM
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* Risk appetite supports rand

* Stocks gain in thin trading volumes

JOHANNESBURG, Dec 28 (Reuters) - South African stocks began the last week of 2009 with substantial gains on Monday, while risk appetite boosted the rand against the dollar.

At 1527 GMT the rand traded 0.6 percent stronger at 7.4750 to the greenback from its last close at 7.52.

The JSE Top-40 index of blue chips added 1.18 percent to 25,264.29 points and the broader All-share index gained 1.12 percent to 27,888.91 points.

"Most guys are still on a holiday break so it's very, very quiet and very few guys can move the market. It's overstated," one trader said.

Miners gained as commodity prices cruised higher, boosting BHP Billiton by 1.32 percent to 239.30 rand and Anglo American by 1.03 percent to 326.51 rand.

Sasol rallied 2.30 percent to 300.76 rand as the price of crude oil topped $79 a barrel, the highest level in more than a month.

Elsewhere, Tiger Brands was up 4.33 percent to 174.49 rand, Telkom was 2.12 percent higher at 36.66 rand and MTN Group perked up 2.41 percent to 117.70 rand.

The rand has recovered from a near 6-1/2 week low of 7.7651 touched last week partly due to a retreat in the gold price, a key driver for the local currency due to South Africa's status as a leading producer of the metal.

"As we saw the gold price turning, we've also seen the rand moving in a (firmer) direction. At the same time we've seen positive data coming out of the U.S. last week which saw greater risk appetite," a trader in Johannesburg said.

"For a while the biggest indicator for which way the rand's going to go will be the euro and in these last few days we've seen the euro firming against the dollar," he added.

Government bonds weakened slightly, and the yields on the 2015 and 2036 notes subsequently edged half a basis point higher to 8.435 and 8.805 percent respectively. (Reporting by Stella Mapenzauswa and Tiisetso Motsoeneng; Editing by Anthony Barker)

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