Bloomberg News

South African Stocks Head for 11-Week High on Euro-Area Hopes

October 17, 2011

Oct. 17 (Bloomberg) -- South Africa’s share gauge headed for its highest close in more than 11 weeks as commodity prices rose on optimism Europe’s sovereign debt crisis will be contained, supporting demand for raw materials.

The FTSE/JSE Africa All Share Index advanced 0.9 percent to 31,404.20 by 11:07 a.m. in Johannesburg, a second day of gains. A close at that level would be the strongest since July 28. Copper for three-month delivery rallied as much as 1.5 percent to $7,660 a metric ton in London, its highest price in almost three weeks. Anglo American Plc, the mining company that accounts for more than 9 percent of the benchmark measure, added 1.2 percent. BHP Billiton Plc, the world’s biggest mining group, rose 0.9 percent.

Group of 20 finance ministers and central banks concluded weekend talks in Paris endorsing parts of the emerging plan to avoid a Greek default, bolster banks and curb contagion. They set an Oct. 23 summit of European leaders in Brussels as the deadline for it to be delivered.

“The issues in the euro zone seem to be playing themselves out and I think the G-20 putting the euro zone to task has helped bring about a bit of stability to the market, though I suspect volatility is something we are going to have to live with for the next two or three months at least,” Mohil Bandulal, head trader at Sasfin Securities, a unit of Sasfin Holdings Ltd., said by phone from Durban. “We are seeing a return of interest in the mining stocks and that was quite clear by the end of last week.”

The S&P GSCI Spot Index has added 3.5 percent in the past two trading sessions, taking its gain for the year to 2 percent. The index declined 12 percent last month on speculation that slower economic growth will ease shortages in everything from copper to corn.

--Editors: Ana Monteiro, Alex Nicholson

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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