JOHANNESBURG, July 30 (Reuters) - South Africa's rand gained against the dollar on Friday supported by better-than-expected trade data while financial firms led the bourse lower.
The blue-chip Top-40 index fell 0.73 percent to 25,224.60. The broader All-Share index dropped 0.68 percent to 28,355.21.
Data showed the trade account registered a 5.6 billion rand surplus in June on higher exports.
The rand gained 5 percent in July mainly on speculation that British HSBC could buy local bank Nedbank.
It has retreated from a 3-1/2 month high of 7.2850 to the dollar hit on Thursday and dealers see the currency maintaining its gains, with potential to test a key level of 7.25, which has been breached only twice in the past year.
At 1550 GMT, the rand was trading at 7.2930 against the dollar, 0.57 percent firmer than New York's close of 7.3350.
'The rand had a reasonable day and confirmed a range of between 7.28 and 7.38. We couldn't get above 7.38 and we would have to break 7.28 on the downside to pick up any momentum,' said Jim Bryson, dealer at Rand Merchant Bank.
'It will depend on the euro next week. If the euro (firms) we can see the rand drifting back towards the 7.20s,' he added.
Government bonds firmed on Friday, having gained significantly this month on expectations of a rate cut.
The central bank left the repo rate unchanged at 6.5 percent last week but hopes for further easing linger as inflation has softened and the economic recovery remains weak.
The yield on the 2015 bond was down 3 basis points to 7.585 percent and that on the 2036 note was down 1 basis point to 8.4 percent.
On the bourse, the country's largest retail bank Absa, fell 2.1 percent to 136.00 rand after its late Thursday statement that it expected half-year profit to fall by as much as 5 percent.
The bank, majority owned by Britian's Barclays, said revenue did not grow, hit by slack demand for loans.
Other financial firms also declined on concerns they too may see lower earnings.
'(Absa) mentioned that the revenue line is hurting, we don't know if that is peculiar to Absa itself,' said Rob Nagel, senior portfolio manager at Cadiz Asset Management.
Rival Standard Bank fell 1.5 percent to 113.50 rand while Nedbank gave up 0.7 percent.
Asset manager and investment bank Investec fell 2.4 percent to 59.51 rand. The firm said on Friday that Q1 operating income rose 11 percent. However, it cautioned that bad debts remain high.
South African banks, which were hit hard by a recession, are still struggling to post convincing growth as unemployment and debts remain high in Africa's biggest economy.
Shares of Mercantile Bank fell after the firm called off merger talks with rival Sasfin. Mercantile Bank shares fell 11.5 percent to 23 cents while Sasfin rose 0.3 percent to 37.40 rand.
(Reporting by Phumza Macanda and David Dolan) (For more Africa cover visit: http://af.reuters.com -- To comment on this story email: SouthAfrica.Newsroom@reuters.com) Keywords: MARKETS SAFRICA/CLOSE
(phumza.macanda@thomsonreuters.com; +27 11 775 3152; Reuters Messaging:phumza.macanda.reuters.com@reuters.net)
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