#RandReport: Rand hits one-week best; stocks lifted by banking and mining shares

At 1500 GMT the rand traded 2.03% firmer 13.2925 per dollar, its firmest level since 5 July.

Picture: EWN.

JOHANNESBURG - The rand and bonds raced to their firmest levels in a week on Wednesday as investors cashed in on the dollar's recent rally and saw an improved outlook for the economy despite recession and political uncertainty.

Stocks also rose, boosted by the firmer currency, higher commodity prices and renewed demand for local blue-chips on the back of a sell-off in previous weeks.

At 1500 GMT the rand traded 2.03% firmer 13.2925 per dollar, its firmest level since 5 July.

The rand led a recovery by emerging market currencies sparked by a slide in the dollar, after more Russia-linked controversy for Donald Trump and Federal Reserve boss Janet Yellen's cautious tone in her testimony before the US Congress.

Chief economist at Old Mutual Rian le Roux said global conditions remained supportive of the rand despite signals by US and European central banks they would soon reduce their massive bond-buying programs and lift interest rates.

"The biggest concern in the short term is the fiscal situation," le Roux said.

"Losing the investment grade rating on local bonds is also a big worry," said le Roux, adding that growth would likely reach 2% in the second quarter after a 0.7% contraction in the first.

The benchmark government bond due in 2026 extended gains, with the yield down 12.5 basis points at 8.78%.

In equities, banking and mining shares led the bourse higher, with the benchmark Top-40 index climbing 1.04% to 46,674 points, while the wider All-share index was 1.11% higher at 52,905 points. Shares in Standard Bank rose 3.1% to R149, while those of First Rand, Rand Merchant , Barclays and Capitec were all up more than 2%.

Platinum producers Anglo American Platinum, Impala Platinum and Northam were all more than 2% higher at R310, R36.30 and R37.77 respectively.

Spot platinum was 1.49% higher at $912, while spot gold held steady rising to 0.3% $1,220.

Media giant Naspers was up 1.9% to R2,632 following news that Tencent, in which it holds a $113 billion stake, had applied for a licence in Malaysia to offer local payment services via its WeChat Pay service.

"We had quite an aggressive sell-off in previous weeks so people are coming back in and looking for value in the blue-chip shares," said equities trader at Cratos Capital Greg Davies.