* Rand recovery aided by positioning for reversal
* Stocks flat, held back by rand hedge shares (Adds latest figures, analyst comments)
JOHANNESBURG, Oct 10 (Reuters) - South Africa’s rand staged a late-session rally on Tuesday away from 6-month lows as investors took profits on the dollar’s recent rally and positioned for a run lower by the rand, while bonds were firmer and stocks traded sideways.
By 1600 GMT the rand was 1.12 percent firmer at 13.6450, further away from the six-month trough of 13.8025 reached on Friday as pressure from potentially fast-rising lending rates in United States put pressure on emerging markets.
“The rand is tracking other emerging currencies. There haven’t been much flows from offshore but this is a normal market retracement as the market seems to have been caught a touch long,” said Standard Bank currency trader Oliver Alwar.
A firmer gold price also aided the rand’s bounce from its worst levels since April, but Alwar said the rally would be short-lived and the currency would likely approach the 13.9500 technical support mark this week.
Stocks were barely changed as shares which earn most of their revenue abroad weakened as the currency strengthened, holding back further gains on the bourse.
On the bourse, the benchmark Top-40 index ticked up 0.88 percent to 51,363 points while the All-Share index lifted 0.17 percent to 57,630 points, at a record close.
Gains on the bourse were curbed by rand-hedged stocks, which make the bulk of their revenue outside South Africa and tend to weaken as the currency strengthens.
“The market is coming off the highs where we benefited from a weaker rand so with the rand strengthening then it becomes a bit negative for those rand hedges,” said BP Bernstein portfolio manager Makwe Masilela.
Mediclinic fell 1.76 percent to 121.63 rand, Richemont lowered 0.66 percent to 124.15 rand and BHP Billiton dropped 0.54 percent to 249.64.
The market was also held back by technical factors, with momentum indicators tracked by some analysts suggesting the main indices had strayed into overbought territory at current highs.
This could constrain further gains in the short-term.
Among the biggest gainers on the bourse, Dis-Chem Pharmacies rose 7.59 percent to 31.20 rand after it flagged higher half-year profits.
In bonds the yield on the benchmark paper due in 2026 shed 10.5 basis points to 8.685 percent. (Reporting by Mfuneko Toyana and Tanisha Heiberg; Editing by Richard Balmforth)