* Volatile rand tracks euro
* Bonds yields climb in technical correction
* Stocks in biggest intra-day jump in 15 months
By Stella Mapenzauswa and Helen Nyambura-Mwaura
JOHANNESBURG, Aug 11 South African stocks added
more than 3 percent on Thursday, the biggest daily percentage
increase in 15 months, boosted by sentiment generated by
better-than-expected U.S. labour market data.
The rand recouped earlier losses against the dollar, largely
tracking a firmer euro, but remained vulnerable to market
volatility linked to global financial worries which have cast a
pall on the outlook for the domestic economy.
Government bonds fell, giving back some of the previous
day's strong gains which were prompted by traders pushing out
their expectations of interest rates rises to mid next year on
signs growth is stalling in Africa's biggest economy.
At the bourse, the benchmark Top-40 index added 3.3
percent to 26,297.69, the highest daily increase since May 2010.
It has fallen nearly 6 percent this month. The broad-based All
Share index added 2.9 percent to 29,490.20 on Thursday.
The banking index surged more than 4 percent and
Standard Bank , Africa's biggest lender by assets,
gained 4.4 percent to 94.50 rand after reporting a surprise 11
percent rise in half-year earnings.
Resource firms such as Kumba Iron also benefited
from the rally. It ended nearly 6 percent up at 499.00 rand.
Gold miner Gold Fields surged 4.9 percent to 118.00
rand, riding on record bullion prices and after reporting second
quarter profits jumped 15 percent.
"We are definitely seeing a turn in sentiment," said Devin
Schutte, a trader at Newstrading, but warned that trading would
still be driven by news flow out of Europe.
Whispers that France and Italy could ban short selling would
be negative for the markets, he said.
There has been speculation that Europe could ban
short-selling after Greece banned the practice for a period of
two months earlier this week.
The Johannesburg bourse's volatility index -- a
measure of investor fear similar to the CBOE Volatility Index
in the United States -- has spiked 24 percent since the
beginning of the month.
RAND STABLE, BONDS CORRECT
The rand was at 7.24 to the dollar by 1537 GMT, up
0.28 percent on Wednesday's close in New York and off Thursday's
low of 7.3438.
Traders said the rand had been cheered by a stronger euro
and a firmer open on Wall Street on a better-than-expected U.S
labour market report and a rebound in financial shares.
"Euro is up from 1.4130 to 1.4280 so the rand is just coming
down from that mid 7.30's area. Things seem to be settling down
a bit, I think we can stay at these ranges unless the Dow comes
under pressure overnight," RMB trader Jim Bryson said.
But Bryson cautioned: "I think there's still potential for
volatility over the next 24 hours."
Government bond yields climbed higher on Thursday in what
traders was a technical correction from Wednesday's slide to
The yield on the benchmark four year note closed
eight basis points higher at 7.0 percent and the 15-year issue
jumped 10 basis points to 8.325 percent.
Traders are bracing for another volatile session after very
choppy trade on Wednesday as investors attempt to figure out
where best to put their money during the global rout.
"The rand is firming on the euro/dollar bounce and positive
stock futures, but expect it to remain volatile and swing with
wider market flows," said emerging market analyst Christopher
Shiells of Informa Global Markets.
Expectations that foreigners will keep buying South African
bonds with cheap U.S. dollars is supportive of the rand and
helped cap losses overnight, IGM's Shiells said.
The local forward rate agreements market -- contracts used
to gauge interest rate expectations -- is pricing in a slight
chance that the Reserve Bank will cut interest rates sooner than
(Editing by Toby Chopra)