* Rand treats as chance of early Zuma exits fades
* Stocks tread water led lower by banking sector
(Updates figures, fresh quotes, adds background)
JOHANNESBURG May 29 South Africa's rand
weakened on Monday after President Jacob Zuma defeated over the
weekend another call from inside the ruling party for him to
step down, while stocks closed flat, hampered by the banking
At 1710 GMT the rand weakened 0.76 percent to
12.9675 per dollar, erasing most of the gains in made in the
previous session as investors bet on strong opposition to Zuma
continued leadership of the African National Congress and the
Zuma is facing mounting pressure against him from ANC
members, opposition parties and civil society since he axed
respected finance minister Pravin Gordhan in March, triggering
credit rating downgrades.
But on Monday, the secretary general of the ANC Gwede
Mantashe poured cold water on the possibility of a Zuma exit
before his term as national president ends in 2019.
Mantashe also told reporters that members of the ANC caucus
in parliament would be ordered to vote along party line in a no
confidence motion against Zuma brought by opposition parties.
"We expect the rand to continue to weaken in the next few
sessions, with the USD/ZAR breaching the key 13.0275 resistance
level on concerns about further sovereign rating downgrades,"
said economists at 4Cast in a research note.
Moody's, which still rates the country two notches above
sub-investment grade, is expected to announce its credit
decision on Friday following a visit to the country last week to
meet with policymakers, business and labour unions.
In fixed income, bonds were also weaker, with the benchmark
paper due in 2026 adding 0.5 basis points to yield
On the bourse, the benchmark Top-40 index closed
unchanged at 47,534 points while the All-Share index
dipped 0.1 percent to 53,944 points.
The banking sector fell 0.82 percent preventing
further gains following the sectors rally ahead of the weekend
amid rumours Zuma would be ousted.
"Banks which were quite strong ahead of the weekend, perhaps
pricing in that Zuma might be ousted, and with the NEC meeting
over the weekend now banks are a little bit disappointed over
that and coming back a little bit," Cratos Capital equities
trader Greg Davies said.
FirstRand fell 0.84 percent to 50.67 rand, Standard
Bank dropped 0.89 percent to 151.99 rand and Capitec
Bank lowered 1.45 percent 786.50 rand.
(Reporting by Tanisha Heiberg and Mfuneko Toyana)