JSE stocks tick up on resourcesComment on this story
Johannesburg - South African stocks edged up nearly half a percent on Monday, as investors picked up shares of Kumba Iron Ore and other resource companies, betting they had fallen too far in a recent sell-off.
Shares of African Bank Investments extended a recent slide, falling 3.5 percent to 8.11 rand after Moody's cut its rating on the unsecured lender's international debt to “junk” status last week.
Investors were returning to shares of resource companies, which have been hammered in recent sessions, hurt by worries about global growth and strikes at home.
“I think the resources are where the value is,” said Kyle Dutton, a broker at Mercato Financial Services in Johannesburg, citing depressed valuations. But he cautioned the rebound may be short-lived.
“At this point, I think the market is still quite volatile and the resources could come under pressure.”
The benchmark Top-40 index rose 0.47 percent to 44,852.57.
The broader All-Share index added 0.4 percent to 49,817.89.
Kumba Iron Ore rose 4 percent to 336 rand.
The producer of the steel-making ingredient had been the worst Top-40 performer over the previous five sessions, declining 9 percent.
Shares of AngloGold Ashanti, Africa's top producer of the precious metal, rose 1.6 percent to 167.60 rand.
The company had fallen nearly 6 percent in the previous five sessions.
Resources companies, many of which sell metal for dollars but pay their costs in rand, were also boosted by the weaker local currency, after it slumped to its lowest in two months.
Trade was relatively slow, with 144 million shares changing hands according to preliminary bourse data.
Advancers outnumbered decliners, 154 to 147, while 62 shares were unchanged. - Reuters