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#RandReport: Rand gains on global risk rally

The rand rallied for a fourth consecutive session, lifted by improved demand for riskier currencies globally.

FILE: Picture: Christa Eybers/EWN.

JOHANNESBURG - The rand rallied for a fourth consecutive session on Wednesday, lifted by improved demand for riskier currencies globally as investors bet the European Central Bank (ECB) would extend its bond-buying programme.

Stocks ended higher, helping the main index bounce back from its lowest level in nearly 10 months with Steinhoff in demand after the retailer lifted its quarterly operating profit.

By 15:30 GMT the rand had gained 1.33% to 13.4875 per dollar, breaking through the crucial technical barrier of 13.5000 that traders said could see the unit strengthen even further.

The rand brought its gains against the greenback to more than 4% since last Friday's decision by S&P Global Ratings to keep the country's credit score at investment level.

"The expectation that the ECB will announce an expansion of its asset purchasing programme should support demand for the currency," ETM Analytics market analyst Ricardo da Camara said.

The rand was also soothed by a report on Wednesday that business confidence had risen to its highest in four months in November.

Da Camara said third-quarter current account figures, due for release on Friday by the central bank, would determine whether the rand could hold on to recent gains.

"For the markets, longer term, it will give an indication on how the country will be able to finance the budget deficit," he said.

On the bourse the blue-chip JSE Top-40 index advanced 1.2% to 42,927 and the broader All-share index added 1.1% to 49,476.

Steinhoff topped the gainers' list on the benchmark index, rising 9.5% to 69.75, its biggest one-day percentage gain in nine years.

The company, which is also listed in London, reported a 12.5% rise in quarterly operating profit on Wednesday, boosted by strong sales at its clothing and footwear business.

MTN was also in favour, rising 2.5% to R114.33 after the mobile phone group said it had strengthened its leadership with two new executives.

In fixed income, the yield for the benchmark government bond due in 2026 fell 12 basis points to 8.825%, its firmest level since 10 November.