February 26, 2018 / 3:39 PM / 3 months ago

UPDATE 1-South Africa's rand pulls off three-year highs, stocks rise

(Updates with closing prices)

JOHANNESBURG, Feb 26 (Reuters) - South Africa’s rand pulled back from three-year highs scaled earlier in Monday’s session as technical factors weighed, while stocks rose with Sasol among the advancers after it posted solid results.

At 1500 GMT, the rand was 0.58 percent weaker on the day at 11.61 to the dollar, after earlier hitting 11.51, its best level since February 2015.

But momentum indicators tracked by some analysts suggest the rand is near over-bought levels, which could cap further gains even against the globally softer dollar, as investors bet the new head of the U.S. Federal Reserve will steer a steady course.

The rand’s rise to three-year highs has been driven in part by the resignation earlier this month of scandal-tinged former president Jacob Zuma and his replacement by Cyril Ramaphosa, who is seen as investor friendly and committed to good governance.

In fixed income, bonds firmed with the yield on the benchmark government instrument due in 2026 falling 2.5 basis points to 8.01 percent.

Among equities, South African petrochemicals group Sasol rose over 3 percent before paring gains to close 1.4 percent higher after it unveiled a 17 percent increase in interim earnings and lifted its dividend.

“The business is now in better shape than it was two or three years ago and we are seeing that in the numbers,” said Hanré Rossouw, a Cape Town-based fund manager with Investec which has shares in Sasol.

The benchmark Top-40 index closed 0.22 percent higher at 51,861.36 while the wider All-share index ended 0.26 percent higher at 58,868.93. (Reporting by Ed Stoddard; Editing by Jon Boyle)

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