Johannesburg - South Africa's rand rallied on Tuesday as an emerging market rally and a surprise jump in manufacturing activity locally lifted the currency to a two-month high.
Stocks notched up their third straight day of gains led by miners as bets on the health of global economy sparked a broad-based rally for industrial metal prices.
By 15h45 GMT the rand had gained 1.05 percent to 14.3180 per dollar as the unit wiped out nearly all of the losses triggered by Britain's decision to quit the European Union.
The rand's run was part of a broader emerging markets rally spurred by the ongoing search by investors for high yielding assets, as well as diminishing chances of interest rate hikes this year in the United States.
The rand raced to a session best 14.2755 in early trade, breaking through key technical resistance around 14.3000, a level traders believe could trigger further gains towards the 13.9500 mark, a level last seen in late November.
Positive manufacturing output, which grew by 4 percent year-on-year in May from 3.1 percent in the previous month, helped the rand stay on the foot front.
Bonds inched weaker, with the yield on the benchmark government paper due in 2026 adding 3 basis points to 8.66 percent.
On the bourse, investors worldwide have been piling into risky assets since last week when the US monthly jobs report eased concerns about the resilience of the world's biggest economy.
“Most of the recent moves in the last couple of sessions have been as a direct result of the enormous jobs number last Friday, the health of the biggest economy in the world no longer in dispute really, and that is a good thing,” said Vestact, boutique investment house, in a note.
The blue-chip JSE Top-40 index was up 0.82 percent at 46,056 and the broader All-share index gained 0.72 percent to 52,547.
Mining dominated the gainers' list with Anglo American surging 4 percent to 156.99 rand rival BHP Billiton picking up 1.2 percent to 189.27 rand.
On the downside, Anglo American Platinum sagged 3.4 percent to 383.52 rand after the world's biggest miner of the white metal flagged as much as 70 percent drop in half-year profit.
Trading volumes were slightly below average with more than 261 million shares changing hands, compared with last year's daily average of 296 million shares.
REUTERS