South African stocks down as mining shares slide

JOHANNESBURG (Reuters) - South African stocks fell on Wednesday as shares of major mining companies including BHP Billiton and AngloGold Ashanti tumbled on disappointing earnings coupled with a drop in metal prices.

But shares of retailer Shoprite recovered to end up 2.32 percent at 176.50 rand. The shares lost over 3 percent on Tuesday after the company's first-half earnings failed to justify its high multiples.

"Everybody is quite nervous at this stage," said Martin Lentsoane, managing director of Lehumo Capital, a Johannesburg-based stockbroker.

"We have seen the results out of the mining companies. They have just confirmed what we were expecting, which is the sector is under so much pressure with costs and the unrest."

The benchmark Top-40 index was down 0.84 percent to 36,022.45. The broader All-share index closed 0.75 percent lower at 40,428.28.

The world's largest platinum mining firm, Anglo American Platinum, helped sour the mood for mining firms when it said on Wednesday that persistent labour unrest is jeopardising investment in South Africa and could lead to job cuts.

Precious metal producers have seen production fall due to a turf war for members between rival unions that has clouded the sector for about a year.

Shares of global mining firm BHP Billiton shed 4.08 percent to 296.88 rand after the company reported a 43 percent drop in half-year profit.

AngloGold shares closed at 232.20 rand, down 3.61 percent. The company, which has global operations, reported a plunge in quarterly earnings due to wildcat strikes at its South African mines and troubles at one of its largest African operations.

Other gold mining shares also tumbled when the bullion price dropped to a six-month low as investors were drawn to riskier assets, making gold's safe-haven qualities less appealing.

Gold Fields lost nearly 3 percent to end at 80.64 rand, while Sibanye Gold fell 2.57 percent to 13.25 rand.

Over 230 million shares were traded, according to preliminary bourse statistics, with decliners outpacing advancers 191 to 116, while 62 shares were unchanged.

Source: http://news.yahoo.com/south-african-stocks-down-mining-shares-slide-153248735--finance.html

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