South Africa's rand firms for third straight session

JOHANNESBURG (Reuters) – South Africa’s rand firmed for the third straight session on Wednesday, as reports of medical breakthroughs in the fight against the new coronavirus in China lifted risk appetite.

South African Rand coins are seen in this photo illustration, file. REUTERS/Mike Hutchings/File Photo

At 1500 GMT, the rand traded at 14.7630 per dollar, 0.18% firmer than its previous close.

“The rand is clearly more concerned with external drivers with positive developments in the coronavirus saga simulating appetite for the local currency,” said Lukman Otunuga, senior research analyst at FXTM.

“If the market mood continues to improve, the rand could trade towards 14.60. However, it is worth keeping in mind that concerns over the coronavirus outbreak remain a major market.”

Media reported that a Chinese university had found a drug to treat people with the virus, while researchers in Britain had made a “significant breakthrough” in finding a vaccine.

In the equities market, stocks surged for a second straight day, helped by improved risk appetite, Sasol and Ascendis Health gains.

The Johannesburg All-Share index climbed 1.07% to 57,426 points, while the Top-40 index rose 1.16% to 51,484 points.

The All-Share index was led higher by struggling health and wellness firm Ascendis, up 5% to 1.05 rand, after it said it expects normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) for the six months to Dec. 31 to either fall by 1% or rise by 10%.

Petrochemicals group Sasol topped the blue-chip index, up 4.47% to 245.50 rand as oil prices jumped by more than 3% on Wednesday after reports on the coronavirus drug.

Gold stocks took a breather as risk appetite amongst investors led to a decrease in demand for the safe haven asset.

In fixed income, the yield on the benchmark bond was down 4 basis points to 7.910%.

Reporting by Olivia Kumwenda-Mtambo and Nqobile Dludla; editing by Jonathan Oatis

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