Johannesburg - South Africa's rand fell as much as 1.3 percent against the dollar on Wednesday, mainly reflecting broad dollar gains as investors increasingly price in a US rate hike next month, traders and analysts said.
Stocks rose, however, as buyers piled back into the oversold retail sector. The benchmark Top-40 index rose 1.17 percent to 43,592 points while the All-Share index added 1.16 percent to 50,005 points.
The rand hit a session low of 14.3850 per dollar before clawing its way back to 14.3125 by 15h52 GMT, still down 0.93 percent from Tuesday's New York close of 14.1800.
“It's just a lot of dollar strength at the moment. As we head towards December everyone's expecting a US rate hike to happen. I think it's been priced in about 90 percent now,” Treasury One dealer Phillip Pearce said.
“We've found a whole new range now between 14.1000 and 14.5000 and we're going to be bouncing between that until we have clear guidance after the (Federal Reserve) meeting.”
On the bourse, the retail index climbed 3.11 percent after official data showed a 1.4 percent year-on-year rise in retail sales.
“They are looking a bit oversold at the moment and there's a lot of hope that we are close to the top of the interest rate cycle,” Standard Bank Stockbroking trader Rudi van der Merwe said.
No-frills retailer Mr Price recouped some of its heavy losses from the previous session, adding 5.89 percent to R141.89, while The Foschini Group gained 2.88 percent to R135.65 and Truworths International was up 3.41 percent to R68.50.
Grocery retailer Spar Group rose 3.94 percent to R182 after reporting a 22.1 percent rise in full-year profit.
Trading was below average, with slightly more than 250 million shares changing hands, compared with last year's daily average of 296 million.
Government bonds edged higher across the curve, and the yield for 10-year debt dipped 4 basis points to 9.015 percent.
REUTERS