South Africa's rand recovers, miners lead stocks lower

JOHANNESBURG - South Africa's rand firmed against a weaker dollar on Friday, recovering from losses in the previous session after the central bank unexpectedly cut its benchmark lending rate for the first time in five years. Stocks dipped amid a sell off in mining shares on the back of a stronger rand. At 1503 GMT, the rand traded at 12.9400 per dollar, 0.77 percent firmer than its New York close on Thursday. In fixed income, government bonds extended gains on the rate cut, with the benchmark yield dipping 3.5 basis points to 8.515 percent. "The question now remains where to from here? We know that any cutting cycle will not be too deep and so cheaper funding rates shouldn't be a massive support for our bonds," Rand Merchant Bank analyst Gordon Kerr wrote in a note. "As a result, we still remain subject to the global environment, with particular focus on the (Federal Reserve) as its meeting is coming up next week." On the bourse, the benchmark Top-40 index lowered 0.23 percent to 47,802 points while the All-Share index dipped 0.23 percent to 54,163 points. The mining sector led the bourse lower after falling 1.2 percent on the back of a stronger currency. "Its in a relatively stronger rand environment so there's a bit of a sell off in the miners," said Cratos Capital stock broker Yusuf Moola Assore fell 3.17 percent to 198.51 rand, Anglo American plc dropped 1.35 percent to 184.50 rand and African Rainbow Minerals lowered 2.09 percent to 84.15 rand. Further losses came from retailer Truworths International which fell 1.26 percent to 77.51 rand after flagging stalling full year profits. (Reporting by Olivia Kumwenda-Mtambo and Tanisha Heiberg; Editing by Joe Brock)