UPDATE 1-South African rand rallies as Moody's seen holding fire, stocks rebound

rebound@

* Rand shakes off bears as risk demand returns

* Market rebound over 2 pct, Naspers surges 8 pct (Adds latest prices, analyst comments)

JOHANNESBURG, Oct 12 (Reuters) - South Africa's rand continued to rally on Friday, lifted by a deep Wall Street selloff and near unanimous bets that Moody's will keep the country's credit rating at investment grade.

Stocks snapped a four-day losing streak to end the week positive, led by market heavyweight Naspers.

At 1530 GMT the rand was 1.25 percent firmer at 14.4525 per dollar, posting a fresh one-week best as emerging markets overall benefited from a revival in risk appetite after the two-day slide on Wall Street.

Markets are also widely expecting Moody's to keep Pretoria's foreign currency rating unchanged and are awaiting the mid-term budget (MTBPS) to be delivered by new Finance Minister Tito Mboweni on Oct. 24.

"Although it feels odd that Moody's would announce the review such a short time before the MTBPS, it may also reflect the appreciation that it is a communication tool that will not hold any substantive changes," analysts at Investec said.

In March Moody's affirmed South Africa's investment-grade credit rating and revised its outlook to stable from negative. Last month the agency said there was little chance it would cut the country to 'junk' this year.

Bonds were also firmer, with the yield on the benchmark government bond due in 2026 down 2 basis points to 9.245 percent.

In the equities market, the All-Share index was 2.38 percent firmer at 53,473 points while the blue chip Top-40 index climbed 2.65 percent to 47,273 points.

Global markets recovered on Friday after the aggressive sell-off led by Wall Street.

Naspers led the Top-40 index, rising 8.46 percent to 2,908 rand. Hong Kong's Tencent Holdings, in which Naspers has a 31.2 percent shareholding, closed 8 percent higher. Banks rose 3.32 percent.

On the technical front, Thursday's sell-off drove the local market deep into oversold territory.

"A majority of the bounce is on Naspers. Some key technical levels have been broken and we're not sure how it will play out," said Vasili Girasis, equities trader at BP Bernstein. "My feeling is that the volatility is here to stay for at least the next few weeks."

South Africa's biggest food producer Tiger Brands said on Friday it had re-opened a facility that was closed after it was implicated in the world's largest outbreak of listeria which killed more that 200 people.

Shares in the food producer closed 3.96 percent higher. (Reporting by Mfuneko Toyana and Patricia Aruo; editing by David Stamp)