20101015
reuters

JOHANNESBURG (Reuters) - South African stocks and the rand currency weakened on Friday, after HSBC ended talks to acquire a majority stake in Nedbank, pushing shares of the bank lower and blunting expectations of capital inflows.

Shares of insurer Old Mutual, which has been looking to sell its majority stake in Nedbank, also tumbled on the news.

"The big news of the day is the HSBC-Nedbank deal falling away. Obviously that's had an impact on Old Mutual and that's weighing on our market a little bit," said Andrew Todd, a trader at Imara SP Reid.

The blue-chip Top-40 index fell 0.7 percent to 26,772.72, declining for the second straight session. On Wednesday it booked its highest close since July 2008.

The broader All-Share index fell 0.61 percent to 30,065.99.

The rand fell to a three-day low of 6.87 before recouping some losses.

It was at 6.8125 against the dollar as of 1513 GMT, 0.51 percent weaker than close of 6.7777 on Thursday.

Shares of Nedbank, South Africa's fourth-largest lender, fell 6.1 percent to 137.80 rand, booking its biggest one-day loss in 19 months.

HSBC said earlier on Friday it was no longer in talks with Old Mutual to buy up to 70 percent of Nedbank.