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Rand steadies as support for Gordhan grows

Johannesburg - The rand rallied more than one percent on Monday as political pressure on Finance Minister Pravin Gordhan eased and commodity prices steadied, lifting the currency further away from a one-month trough.

The bourse was weaker as luxury goods heavyweight Richemont gave up some of the past week's gains.

By 15:00 GMT, the rand had gained 1.26% to 14.1475 per dollar from a close at 14.3275 in New York on Friday, bucking the trend of fellow emerging currencies weighed down by hawkish comments by Federal Reserve Chair Janet Yellen.

The rand's rally was sparked by Deputy President Cyril Ramaphosa throwing his support behind Gordhan, saying on Sunday he was concerned about Gordhan's prosecution and that the minister had his support.

Then on Monday business leaders expressed their support for Gordhan, who was ordered by prosecutors last week to appear in court on November 2.

"Local politics is creating a lot of uncertainty, more so than usual," investment analyst at Old Mutual Dave Mohr said.

While the rand gained in the session, data on Monday showed foreign investors had sold off about R6.5bn in both local stocks and bonds.

Government bonds inched lower, with the yield on benchmark paper due in 2026 adding 1.5 basis points to 8.86%.

On the bourse, Richemont was the biggest loser among the blue chips.

The firm, which owns brands such as Cartier and Mont Blanc, had gained more than 12 percent last week after rival LVMH reported better than expected sales. But on Monday Richemont shares shed 3.3% to R91.77.

"A 12 percent move in 5 days is good by any measure and investors are just taking some profit," said Independent Securities trader Ryan Woods.

Banking shares, which fell last week as political uncertainty about the leadership of the finance ministry weighed, closed in the black as more leaders supported Gordhan. FirstRand snapped a two-session losing streak, advancing 1.2% to R44.53.

The benchmark Top-40 index was 0.9% weaker at 44 253 points, while the All-Share index fell 0.7% to 50 769 points.

Trade was muted with around 179 million shares changing hands, compared with last year's daily average of 290 million, according to preliminary bourse data.

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Rand - Dollar
18.91
+0.1%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.13
+0.1%
Platinum
908.05
+1.2%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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