MARKETS WRAP

RAND HITS ONE-WEEK HIGHS

THE RAND rallied more than 1 percent to its firmest in nearly a week yesterday on optimism the central bank has room to boost the flagging economy after consumer inflation fell more than expected.

At 5pm, the rand bid at R15.2378 to the dollar, 9 cents stronger than at the same time on Tuesday, a chunk of those gains coming after the data showed July consumer prices slowed to 4 percent, the lowest since January.

The subdued price-growth reignited bets the SA Reserve Bank may reduce rates again after a 25 basis point cut to 6.5 percent in July, giving a boost to companies and consumers.

A sharp slump in the rand, about 10 percent since the beginning of August, and fears of a global growth recession, had all but extinguished the chances of a cut.

Bonds also responded positively to the inflation data, with the yield on the benchmark paper due in 2026 down 11.5 basis points to 8.275 percent.

On the bourse, stocks strengthened amid positive risk sentiment as investors awaited the outcome of a meeting on US interest rate cuts.

The broader all share index climbed 0.66 percent to 54 638.03 points, while the Top40 index gained 0.6 percent to 48 837.01 points.

Topping the blue chips was Aspen Pharmacare, which gained 6.95 percent to R69.52. Discovery also rose 4.77 percent to R104.87, recovering after being affected by jitters over the National Health Insurance Bill bill. I Reuters