* Rand unchanged from its overnight in New York
* Stocks hit 3-week low
* Pioneer falls on collapsed deal
* Govt bonds recover
(Adds stocks, quotes and updates levels)
By Nqobile Dludla and Olivia Kumwenda-Mtambo
JOHANNESBURG, April 21 South Africa's rand
steadied against the dollar on Friday as developed market
currencies came back in favour, ending a recent rally that has
lifted the unit to 3-week high.
Stocks fell for a fourth straight session to a three-week
low, as Pioneer Food Group weighed and investors stayed
away from risky assets.
At 1530 GMT the rand was trading 13.1500 per
dollar, unchanged from its overnight in New York.
The currency hit a 3-week high of 13.1175 to the dollar on
Thursday as yield-hungry investors ignored the political fallout
and two credit downgrades to "junk" that followed President
Jacob Zuma's sudden firing of his finance minister in late
The rand faced selling pressure as the dollar was back in
favour on the back of subdued risk appetite with investors
cautious ahead of French elections this weekend and possible
announcements about tax cuts in the United States.
"The thing we need to watch for over the weekend and on
Monday is the euro in terms of the French election and its
results. We might see some volatility," Treasury One currency
dealer Andre Botha said.
On the bourse, the benchmark Top-40 index closed
0.51 percent down at 45,500 points, while the broader All-share
index lost 0.58 percent to 52,194 points, a level it
hit on March 31 when Zuma removed then finance minister Pravin
Gordhan in a controversial cabinet reshuffle.
"There are concerns about what's happening on the political
side of things. You're going to have a situation where certain
funds' mandate, particularly offshore investors, are not allowed
to hold junk assets so they have to realign their portfolios
accordingly," said Independent Securities trader Ryan Woods.
Investors sold off Pioneer Food Group shares after the
seller of Ceres juice and Sasko bread said a large potential
deal it was exploring had fallen apart because of ratings
downgrades of the country's sovereign debt.
Shares in Pioneer fell more than 7 percent after the
announcement, booking its biggest daily loss since the cabinet
reshuffle, and closed 4.38 percent down at 169 rand.
"Part of the pricing had been put in place already, the
market had pre-empted that some sort of deal was going to take
place and now they're adjusting their positions because that is
now off the table," said Woods.
In fixed income, the yield for the benchmark government bond
due in 2026 dipped 2.5 basis points to 8.645 percent.
(Additional reporting by Olwethu Bosso; Editing by Jeremy