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UPDATE 2-South Africa's stocks, rand plunge on risk-off market sentiment

(Updates prices)

JOHANNESBURG, Sept 21 (Reuters) - South African stocks latched on to a global market sell-off on Monday spurred by rising coronavirus cases in Europe and dwindling prospects for another economic aid package in the United States.

The pressure also weighed on the rand, weakening it by over 3% as investors fled riskier assets globally.

The benchmark FTSE/JSE all share index nosedived 2.48% to end the day at 53,319 points, a level last seen a quarter ago. It is now down 8% from highs seen in August after the mid-March global crash.

The FTSE/JSE top 40 companies index plunged 2.47% to 49,153 points on the day’s close. It was the fifth consecutive fall in the index of blue chip companies.

“Investors are becoming increasingly worried about the momentum in the economic recovery given the resurgent numbers of global COVID-19 cases and lack of progress on a new U.S. stimulus package,” Hussein Sayed, chief market strategist at FXTM said in a note.

European countries including Denmark, Greece and Spain have introduced new restrictions on activity.

Banks in South Africa, said to reflect the real mood of the economy, led the rout with the banking index down 3.11%.

In the currency market, the rand moved off the six-month best mark of 16.0950 it had hit after the local central bank on Thursday kept lending rates unchanged.

A global selloff in riskier currencies saw the rand weakened by 3.26% to 16.8675 for a dollar at 1555 GMT compared to a close of 16.3350 on Friday in New York.

“Today’s move shows how our domestic currency remains at mercy of sudden bouts of global market volatility, despite the suggestion that the rand may be undervalued on a longer term basis,” IG senior market analyst Shaun Murison said.

Government bonds fell with the yield on the 2030 bond rising by 13.5 basis points to 9.315%. (Reporting by Nqobile Dludla, Mfuneko Toyana and Tumelo Modiba; Editing by Philippa Fletcher and Chris Reese)

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