June 6 (Reuters) – The South African rand strengthened on Monday, as investors globally welcomed signs of an easing of restrictions by China, ahead of a busy policy-focused week in which a European Central Bank meeting and U.S. consumer price data are scheduled.
At 1556 GMT, the rand traded at 15.4075 against the dollar, about 0.85% stronger than its previous close.
The domestic currency has also gained on China’s reopening as its COVID-19 cases decline, further assisting in causing market fears of recession to recede, with the world’s second largest economy freeing up restrictions on economic activity,” Investec economist Annabel Bishop said in a research note, adding that the market expectations for U.S. rate hikes have also cooled.
Investors hope that a raft of central bank meetings this week will give clarity on whether inflation has peaked and how much growth could slow down.
The dollar index , which measures the greenback against six major peers, was up 0.23%.
On the Johannesburg Stock Exchange (JSE), stocks closed firmer, led by technology companies linked to Chinese tech giant Tencent Holdings (0700.HK). Tencent was up after Hong Kong’s Hang Seng tech index (.HSTECH) closed 4.6% higher on a report that Chinese regulators were concluding probes into ride-hailing giant Didi Global Inc and two other firms.
Tech investors and market heavyweights Naspers (NPNJn.J) and Prosus jumped 3.88% and 5.15% respectively. Naspers has a majority stake in Prosus, which in turn holds 28.9% in Tencent.
Resources stocks (.JRESI) also performed well and closed 1.06% higher, after crude hit $120 a barrel earlier, with Sasol Ltd (SOLJ.J)being one of the best performers, climbing 3.21%.
Overall on the JSE, the All-Share index (.JALSH) rose 0.28% to 71,120 points while the Top-40 index (.JTOPI) closed 0.34% higher at 64,536 points.
The government’s benchmark 2030 bond was lower, with the yield up 6.5 basis points to 9.895%.