JOHANNESBURG, Nov 12 (Reuters) - South Africa's rand steadied against the dollar on Friday in a volatile session which saw the it fall more than one percent before coming back to Thursday's closing levels as global economic uncertainty weighed on emerging markets. Stocks ended slightly higher on Friday led by Richemont on above-forecasts half-year profit but miners capped further gains as expectations of a China interest rate hike hit commodity prices. The rand was trading at 6.9302 to the dollar at 1540 GMT, nearly unchanged from its previous close of 6.9340 on Thursday. It weakened more than one percent to trade at a session low of 7.0200, a level ast hit on Nov. 1, before recouping the losses. "Markets in general have been very very volatile and the rand has traded in line with that volatility," Imran Ahmad, emerging market strategist at RBS. "I think the market is coming to the realisation the underlying theme that's been driving emerging market currencies stronger ... remains the dominant driver and hence South Africa remains a high yielding currency," Ahmad added. Among the drivers the rand have been growth differentials, flush global liquidity post quantitative easing and portfolio inflows, according to Ahmad. South Africa's attractive high yields have seen increased foreign inflows into the domestic bond market, which has helped to strengthen the rand to near 3-year highs hit in mid-October. The central bank is due to make a decision on interest rates on Nov. 18 and analysts see a 60 percent chance of a rate cut and 35 percent chance of rates remaining steady at 6.0 percent. A 50 basis point reduction is however unlikely to detract investors as developed nations rates remain relatively low. On the bourse, Johannesburg's Top-40 index of blue chip was 0.52 percent higher at 28,253.76 points and the broader All-share index fell 0.42 percent to 31,692.80 points. "It's another China story again," one Johannesburg trader said. "People are now talking about the possibility of China raising interest rates." Concerns about severe fiscal problems in Ireland that may eventually result in a Greek-style bailout weighed down on shares. Among equity movers, Richemont was the top percentage gainer on the blue chip index, buoyed by half-year profit hat soared more than expected. Shares in the Cartier watchmaker rose 4.49 percent to 38.19 rand. Naspers jumped 3.30 percent to 363.10 rand as Russia's Digital Sky Technologies, in which it holds about 30 percent, looks to expand into China. Miners kept the upside move in check, weighed by lower commodity prices.
AngloGold Ashanti fell 2.52 percent to 348 rand and Lonmin gave up 1.55 percent to 197 rand. Government bonds ended firmer, with the benchmark 2015 note closing at 6.99 percent from its open of 7.025 while the 2026 note closed at 8.055 percent from opening levels of 8.105, according to Reuters data. (Reporting by Xola Potelwa) (For more Reuters Africa cover visit: http://af.reuters.com/ -- To comment on this story email:SouthAfrica.Newsroom@reuters.com) Keywords: SAFRICA MARKETS/ CLOSE (email@example.com; +27 11 775 3098; Reuters Messaging:firstname.lastname@example.org) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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