* Rand gains wiped out on hint of ending tightening cycle
* Stocks up over 2 pct as financials climb
* Government bonds give up earlier gains
(Adds latest figures, analyst quotes)
JOHANNESBURG, Sept 22 South Africa's rand rally
fizzled after the central bank kept rates on hold, while stocks
rose led by financial and retail shares on prospects of fewer
bad debts for lenders and less pressure on consumers.
The central bank left rates steady at 7 percent for a third
meeting in a row, in line with expectations, and revised the
growth prospects for Africa's most industrialised country
upwards to 0.4 percent from zero percent.
By 1530 GMT the rand traded 0.5 percent weaker at
13.6400 per dollar from a session high of 13.3775, wiping out
gains triggered by Wednesday's decision by the U.S. Federal
Reserve to keep interest rates unchanged.
"It could be that the flow, linked to specific deals
recently, has been satiated, and you're also seeing the
beginning of speculation about rate cuts and that's getting
priced in," said economist at ETM Analytics Michael Potgieter.
Bonds also gave up earlier gains, with the yield on
government's benchmark 2026 bond at 8.52 percent at
1500 GMT after shedding as much as 14 basis to a month-low 8.46
On the stock market, the benchmark Top-40 index
rose 2.31 percent to 45,307 points, while the All-Share index
gained 2.24 percent to 51,895 points.
The Fed's decision to hold rates along with a dovish tone
kept emerging stocks higher on Thursday, while the SARB's
decision to keep the repo rate unchanged further supported the
financials and retailer sectors.
"There's less pressure on consumers and that means bad debts
would be contained more than they would of in a higher rate
environment, financials are beneficiaries as would be the
retailers," said a trader at Standard Bank Stockbroking, Rudi
van der Merwe.
South Africa's largest retailer Shoprite Holdings Limited
gained 4.15 percent to 190.70 rand, while Woolworths
rose 3.96 percent to 80.69 rand.
Among financials, Nedbank strengthened 2.98 percent
to 224.50 rand and Standard Bank rose 3.91 percent to
Trading volumes were below average, with 258 million shares
changing hands compared with last year's daily average of 296
(Reporting by Mfuneko Toyana and Tanisha Heiberg; Editing by