The rand recovered on Tuesday as risk appetite improved, having fallen to its weakest in nearly 12 weeks the previous day.
At 1525 GMT the rand was 1% firmer at R17.52 per dollar, having touched R17.78 on Monday, its weakest since May 22.
“While the rand has gained somewhat today it still remains at high risk of volatility, as global financial risk sentiment does,” said Investec chief economist Annabel Bishop.
“Concerns continue to centre on the prospect for global economic recovery, and particularly for the US economy.”
The currency has suffered sharp losses in the past two weeks, losing more than 7% of its value against the dollar as sentiment towards emerging market currencies soured with a pickup in the global economy seeming to be slower than initially hoped.
Stocks were lifted by signs that Sino-US tensions have eased ahead of a crucial round of trade talks, while a rise in crude oil prices helped Sasol and mobile operator MTN Group, which has operations in oil-rich Nigeria.
“The US-China cycle of rising and falling tensions continues. But markets continue to ignore the noise after Bank of China Governor Yi said that China would continue to implement its part of the ‘phase one’ trade deal,” Stephen Innes, Chief Global Market Strategist at AxiCorp, said in a note.
The Johannesburg All-Share index rose 0.72%, while the Top 40 index climbed 0.76%
Among the gainers on the Top 40 were Sasol, the world’s top producer of motor fuel from coal, up 4.44% despite warning that it will report an annual loss after a drop in oil and chemical prices and the impact of the coronavirus pandemic hit earnings.
“A lot of the bad numbers that you saw earlier were priced in although the core figures were still looking better than anybody thought, coupled that with an oil price that is slightly on the upside,” said Independent Securities trader Ryan Woods.
MTN, whose shares have been affected by oil price volatility this year, closed 5.63% firmer.
Bonds weakened, with the yield on the benchmark 2030 government issue adding 4.5 basis points to 9.28%.