JOHANNESBURG - The Rand weakened yesterday along with other emerging markets as investors dumped risky assets after a key free trade advocate in The White House resigned, fanning fears US President Donald Trump will trigger a trade war.

Stocks were knocked by profit-taking in the banking sector after strong gains in the previous session.

At 5pm, the rand bid at R11.8664 to the dollar, 10.64c softer than at the same time on Tuesday, having earlier hit a session-low of R11.92.

While traders worry over the possible trade war, the scenario continues to favour long-rand bets, especially after Tuesday’s economic growth data surprised on the upside.

The economy grew 3.1percent in the October-December period against expectations of 1.8percent.

“This is good news in view of Moody’s rating review at the end of the month - as higher growth facilitates the urgently required consolidation of the public finances,” said analysts at German-based Commerzbank.

“However, we are sceptical whether this high momentum is sustainable,” they said in a note.

Traders said the rand would likely remain in a range between R11.50 and R11.95, with investors on the defensive and keeping an eye on the possible capital reversals if a trade war breaks out.

In fixed income, the yield for the benchmark government bond due in 2026 was up one basis points to 8.12percent.

On the bourse, the benchmark JSE Top40 index weakened 0.48percent to 52005.09 points, while the all share index lowered 0.47percent to 58962.65 points.

The banking sector lost 1.6percent, leading the bourse lower amid profit taking after the sector, which is usually seen as an economic barometer, ended higher on Tuesday on the back of the robust gross domestic product data.

“Yesterday we saw a bit of a push in some of the stocks so we are seeing a breather or bit of profit taking coming in here,” said Independent Securities trader Ryan Woods.

FirstRand retreated 3.95percent to R71.94, Capitec Bank shed 1.76percent to R851.65 and Standard Bank fell 0.48percent to R223.84.

Tiger Brands dropped 7.9percent to close at R371.16.