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JOHANNESBURG - The rand fell yesterday as investors took profits on a rally sparked by the country avoiding a double downgrade on its local currency debt and bets of a business-friendly outcome to the ruling party’s leadership battle.

At 5.08pm, the rand had slipped 0.46percent to R13.7225 to the dollar, moving away from a six-week high of R13.565 touched in the previous session.

The rand had rallied in two previous sessions on relief that ratings agency Moody’s would wait until after the ANC leadership conference and February’s budget, before downgrading the country’s debt.

S&P Global Ratings downgraded the country’s local currency debt to sub-investment grade on Friday and thrust the foreign currency debt deeper into “junk” territory, while Moody’s opted to put the rating on review for a downgrade.

The rand had also benefited from increasing signs that Cyril Ramaphosa was leading Nkosazana Dlamini-Zuma in the race to replace President Jacob Zuma as leader of the ANC.

“We have seen the rand rebound strongly and today (yesterday) that rebound has kind of lost some steam,” said Halen Bothma, market analyst at ETM Analytics.

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Government bonds also weakened, with the yield for the benchmark instrument due in 2026 adding 11 basis points to 9.29percent.

On the bourse, the main stock indices ended higher, tracking an upbeat tone in major overseas markets, though Lonmin was out of favour after a brokerage house cut its target price on the troubled mining company.

The benchmark JSE Top40 index added 0.58percent to 53957.06 points and the broader all share index was up 0.56percent to 60418.39 points.

Lonmin slumped 6.88percent to close at R11.64.

Meanwhile, the Standard & Poor’s 500 (S&P500) and the Dow Jones indices rose in early trading yesterday as bank stocks added to gains following strong economic data and encouraging comments from Federal Reserve officials that sealed the case for a December rate increase.

JPMorgan had climbed 1.9percent and Bank of America was up 2.2percent, making the S&P financial index the biggest gainer among S&P 500 sectors.