S.African stocks up for 5th session; rand steady

JOHANNESBURG, Jan 5 (Reuters) - South Africa's rand steadied against the dollar on Monday and stocks climbed for a fifth session, tracking a New Year rally in Europe as Sasol (SOLJ.J) gained on stronger oil prices.

At 1533 GMT, the rand was trading at 9.3399 to the dollar, not far off its previous New York close of 9.33 in thin trade.

The Johannesburg Top-40 index of blue-chip stocks gained 2.64 percent to 20,203.06 points, its highest closing level since Dec. 17 and the 5th day of gains after a torrid 2008 which wiped out 27 percent of the index's value.

"We're seeing a New Year rally, following optimism overseas," said Frank Fornasari, a trader at Absa Securities. "But I doubt we can keep up the momentum. The market will still be nervous and edgy for a while."

The All-share index rose 2.48 percent to 22,304.43 points. Volumes remained relatively thin after Christmas and New Year holidays.

Global equity investors took heart from U.S. President-elect Barack Obama's plans for up to $310 billion in tax cuts. European stocks marched higher, although Wall Street fell after a week of strong gains.

The rand advanced to a 2-1/2 month high of 9.22 last week as investors worried about the U.S. economy. But the dollar staged a comeback on Monday, hitting a 3-week high against the euro, which is the currency of South Africa's largest trading partner.

"The big news was the massive move in euro/dollar. It looks like a few people were caught long of euros and they needed to bail that," said Paul Peter, dealer at ABN Amro.

He said the rand was likely to weaken.