Rand rallies to seven week high, stocks down

Johannesburg - The rand rose to its firmest in seven weeks on Tuesday, riding a wave of renewed global risk appetite as investors bet that Britons will vote to stay in the European Union.

Stocks snapped three days of gains as mining firms weighed on the bourse.

By 16:00 GMT the rand was 0.65% firmer at 14.7520 per dollar, bringing its gains against the dollar to more than 3 percent in the last three sessions.

The rand climbed as much as 1.5% to 14.6225, its firmest since May 5, and despite easing slightly in the latter part of the session remained within touching distance of technical resistance around 14.700.

Bonds inched firmer, with the yield on the benchmark government paper due in 2026 cutting 1 basis point to 8.99%.

While investors' attention focused on Thursday's Brexit vote, traders said local inflation data for May due on Wednesday would be watched for clues on whether the central bank would continue lifting lending rates despite weak growth.

Earlier, the South African Reserve Bank's leading business cycle indicator, which tracks major sectors of the economy, dipped 0.9% month-on-month in April.

"It is clear that SA has become trapped in a low growth environment for a variety of reasons, both domestically and internationally," said chief economist at Stanlib Kevin Lings.

On the stock market, Anglo American Platinum (Amplats) was the biggest loser among the blue-chips after it flagged a drop of more than 20% in half-year earnings.

Shares in Amplats dropped 5% to R360, while its parent Anglo American was 1.9% weaker at R141.70.

"Gold, platinum and other resources were all lower," said Cratos Capital equities trader Greg Davies, adding that a crude oil price of below $50 per barrel took the shine off commodities.

The rand's recent strength also made companies who earn the lion's share of their revenue outside South Africa, among them mining firms, less attractive. Luxury goods group Richemont shed 1.45% to R90.76.

"You buy Richemont if you think the rand is going to be weak, but that's not what traders think now," said Davies.

The benchmark Top-40 index was 0.22% down at 46 912 points while the All-Share index declined 0.15% to 52 955 points.

Trade was muted with around 222 million shares changing hands, compared with last year's daily average of 296 million, according to preliminary bourse data.