South Africa’s rand gives up earlier gains, stocks firm

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Mixed denomination South African rand notes and coins are seen in this arranged photograph in London, U.K., on Wednesday, Oct. 31, 2012. South Africa's rand gained and bond yields rose after Reserve Bank Governor Gill Marcus said investors shouldn't assume the central bank will automatically cut rates to boost growth. Photographer: Chris Ratcliffe/Bloomberg via Getty Images

* Rand on the back foot as truce doubts return

* Bourse firm, gold stocks over 2 pct (Add quotes, updates prices)

JOHANNESBURG, Dec 4 (Reuters) – South Africa’s rand weakened on Tuesday as waning hopes of a swift resolution to the U.S.-China trade war overshadowed news of the economy snapping out of recession in the third quarter and surpassing economists’ expectations.

Stocks were firm but pared some of Monday’s gains following the trade war truce between the U.S. and China as investors awaited detail.

The rand was trading at 13.7500 per dollar by 1522 GMT, 0.44 percent weaker than its close in New York of 13.6900. The currency had firmed more than 1 percent, hovering near four-month highs, and touched an intraday low of 13.5425.

Government bonds also weakened, with the yield on the benchmark bond due in 2026 rising 1 basis point to 8.930 percent.

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“The rand has given up much ground despite the strong rebound in the economy, which will create a supportive environment for revenue growth,” said ETM economist Halen Bothma.

Africa’s most industrialised economy expanded 2.2 percent in the third quarter, snapping out of recession after a revised 0.4 percent contraction in the second quarter in a boost for President Cyril Ramaphosa, who has pledged to re-start growth after a decade of stagnation under his predecessor, Jacob Zuma.

Economists polled by Reuters had predicted a 1.6 percent expansion.

Optimism over a rapprochement between U.S. President Donald Trump and China’s Xi Jinping at the G20 meeting was replaced by scepticism, as none of the commitments that U.S. officials said had been given by China were agreed to in writing and specifics were yet to be hammered out.

In equities, the All Share index rose by 0.29 percent to 52,228 points while the Top 40 index was 0.28 percent firmer at 45,180 points.

Gold stocks rose 2.27 percent led by AngloGold Ashanti which closed 3.39 percent firmer at 144.40 rand.

“Yesterday was such a big day and the pull back in the stocks is not unusual at all. Not much detail about the trade deal has been provided yet so there is still uncertainty in the markets,” said Wayne McCurrie, FNB Wealth and Investments portfolio manager.

Reporting by Nomvelo Chalumbira and Patricia Aruo, editing by Ed Osmond

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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