JOHANNESBURG (Reuters) - South African stocks surged to their biggest one-day gain since mid-2002 on Wednesday and the rand gained against the dollar as a rally in global equities and firmer metal prices improved investor risk appetite. Government bonds also gained after lower-than-expected consumer price data that suggested inflation may have peaked and the next move in interest rates will be a cut. Johannesburg's Top-40 index of blue chips soared 7.15 percent to 17,999.69 points, while the broader All-Share index leapt 6.71 percent to 19,794.74 points. Markets worldwide were lifted by bargain-hunting following a big rally on Wall Street on Tuesday amid widespread expectations of a sharp cut in U.S. interest rates. "Very strong day on the back of a really really strong session in the U.S. last night," BoE Private Clients' Garth Mackenzie said. "We've seen big buying in stocks like Anglo and Billiton and Sasol ... there's a lot of money coming in to a very very oversold market." Most blue chips closed higher and the JSE's SA Volatility index, a so-called "fear gauge" of investor sentiment, was off its record highs, indicating an improvement in sentiment on the day. Johannesburg's mining index leapt 11.79 percent as precious metal prices rallied. Gold Fields closed up 16.13 percent to 63 rand, Anglo American rose 14.86 percent to 221 rand and BHP Billiton jumped 12.19 percent to 154.29 rand. The rand was trading at 9.99 to the dollar around 1531 GMT, about 2.82 percent firmer than its last New York close of 10.2799 on Wednesday. It touched 9.90 earlier. "It seems that risk aversion is calming down ... and some exporter selling and liquidation from longs has been enough for the rand to extend gains," said Nicholas Kennedy, emerging market analyst at 4CAST in London. "But it is difficult to get too enthusiastic about the mid-term outlook... we are looking for consolidation around current levels of 9.50/dollar." A wide current account deficit and political uncertainty ahead of next year's elections are worrying investors. The firmer rand currency and easier inflation numbers, with the CPIX consumer inflation slowing to 13.0 percent year-on- year, saw bonds gain significantly. The yield on the 2010 bond fell 51 basis points to 9.65 percent and was down 29.5 basis points to 9.11 percent on the 2015 issue. The 2036 bond yield fell 22.5 basis points to 8.41 percent. "We saw better buying of bonds after the inflation numbers and coupled with a stronger currency, this added impetus to the bond market," said a bond dealer at Standard Bank. "We still believe interest rates will be on hold in December and we should see a cut in the first quarter of next year." The central bank has raised rates by 5 percentage points since June 2006 in an effort to arrest inflation. It left the repo at 12.0 in its last two meetings citing in part an improved inflation outlook but warning the weaker rand was a risk.

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