19/04/2010 A generic pic of the JSE board at Sandton JHB. Photo: Leon Nicholas

Johannesburg - South African stocks gained on Thursday, rebounding from a steep fall the day before as investors brushed aside a contraction in the US economy, with many betting it means global interest rates will remain low.

Ascendis Health was among the gainers, adding almost 3.5 percent to 11.50 rand after it agreed a 200 million rand black empowerment deal which it said would mean no earnings dilution or cost to shareholders.

South African companies are required by law to meet various targets to increase black ownership as part of a drive to rectify past apartheid-era imbalances.

Bell Equipment was among decliners as it is one of the companies that could be impacted by a strike over wages announced for next week by 220,000 members of South Africa's largest union NUMSA.

Shares of African Bank Investments maintained their downward march of recent weeks, triggered by mounting concerns about the low-income lender's accumulation of bad debts.

It fell 8.5 percent but its 14-day RSI, a momentum indicator tracked by analysts, shows it has now strayed deeply into over sold territory, suggesting it could be in for a rally.

The broad All-share index added 0.82 percent to 50,761.82 while the benchmark Top-40 index rose 0.89 percent to 45,787.33.

Both indices remain in easy reach of record highs scaled just last week and a Reuters' poll of 10 analysts on Thursday forecast the local bourse would gain just over 3 percent between now and the end of the year.

The poll predicted the Top-40 would end the year at around 47,200.

Analysts said the bourse will benefit from still ample global liquidity and confidence in the outlook for well managed local blue chips.

“It is going to be an improving global economy, investors wanting to be exposed to well-organised companies that are growing profit margins,” said Paul Theron, chief executive at asset manager Vestact.

“I expect bonds and cash in general to deliver very poor returns, so the only way to make a sustainable return is to be in equities,” he said. - Reuters