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Stocks break two-day losing streak on metals rally

Gold prices rose 1% to a three-week high as investors sought safety from volatile currency and stock markets.

South African stocks rose on Tuesday led by mining firms such as Harmony Gold and AngloGold Ashanti as the devaluation of the currency of top consumer China pushed the risk-averse bullion higher.

China unexpectedly devalued its yuan currency after a run of poor economic data, sending shares and global currencies lower. Gold prices rose 1% to a three-week high as investors sought safety from volatile currency and stock markets.

This benefited AngloGold, Africa’s top bullion producer, which rose 3.5% to R77.61 while Harmony climbed 4.8% to R12.70.

“Gold stocks have performed particularly well today – we have seen a nice bounce back in prices because of the surprise devaluation,” said Vasili Tirasis, a trader at BP Bernstein.

The benchmark Top-40 index rose 0.41% to 46,622 points while the wider All-share index ended up 0.4% at 52,221 points.

Iron ore hit a one-month high on hopes of Chinese demand picking up next month, lifting producers and steel companies.

Aluminium products maker Hulamin, the biggest gainer in the index, rose 10.9% to R5.40.

ArcelorMittal South Africa, the second-biggest gainer on the bourse, added 9.3% to R16.83 while Kumba Iron Ore ended 2.4% higher at R98.99.

Also among the gainers was Sovereign Foods which rose 6.3% to R8.50 after the company said it expected first-half earnings to more than double.

On the flip side, Bell Equipment lost 3.7% to R9 as the firm reported a 16% decline in revenue and warned that tough trading conditions to persist.

Trading was active with 200 million shares changing hands, according to preliminary bourse data. This outpaced last year’s average of 187 million shares. 

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