Bourse strengthens 2% on recovery in mining stock

SHARES ended higher on the first day of the fourth quarter yesterday, rising nearly 2 percent as mining companies made a strong recovery from oversold levels following a spate of strikes.

Indices were further boosted by an upbeat mood in major overseas equity markets after a surprise expansion in US manufacturing last month.

A wave of illegal mine strikes has hit mining stocks on fears of production losses or expensive wage deals with striking workers.

“There are

underlying concerns about the unrest in the industry, but the situation seems to be contained and that has helped some of the stocks to recover and push higher,” said Travis Robson, a trader PSG Securities.

The Top40 index added 1.8 percent to 32 085.81 points yesterday and the all share index improved 1.4 percent to 36 269.27.

Anglo American topped the gainers list on the benchmark index, climbing 4.7 percent to R256.04, after falling almost 7 percent in the previous five sessions.

The company said after the close of trade yesterday that attendance at its Rustenburg operations remained low and called on workers to attend disciplinary hearings today.

Rival BHP Billiton was up 3.4 percent at R266.58. Copper rose as the euro rebounded and the dollar fell, but more evidence of shrinking factory activity in China and renewed worries over debt problems in Spain capped gains.

Coal of Africa, which has also been hit by a wildcat strike, surged 14.7 percent to R2.42 after China’s Beijing Haohua Energy Resource offered $100 million (R832m) for a 23.6 percent stake in the coal mining firm.

Imperial Holdings, the biggest transport group in South Africa, fell 2.4 percent to R183 as a strike for higher pay by truck drivers entered its second week.

A total 166 million shares changed hands, with 154 companies gaining ground and another 137 losing value.