S.African stocks down as resources firms hammered

JOHANNESBURG (Reuters) - South African shares ticked lower on Tuesday on concerns over Europe's economic woes and as a spreading string of strikes in the country's mining sector weighed on firms such as Coal of Africa.

Barloworld, the main supplier of Caterpillar products in southern Africa, also fell sharply after the U.S. firm cut its 2015 earnings forecast, citing weakening demand from the mining industry.

The Top-40 share index shed 0.5 percent to 31,776.31, and the wider All-Share lost 0.46 percent to 36,041.48. The mining index shaved off nearly 2 percent.

"Some of the European concerns are coming back to the forefront of people's minds, there's a lot of talk that Spain needs to come through and negotiate a bail out," said Andrew Bryson, a trader at BoE Stockbrokers.

"The initial optimism on the back of the QE (quantitative easing) programme has failed a little bit and people are focused now on what is fundamentally happening on the ground. Some of the optimism is fading a little."

Spain is at the centre of market concerns, with the government due this week to present its draft budget for 2013, outline new structural reforms for the economy and release the results of stress tests on banks.

In South Africa, Coal of Africa's shares sunk 15 percent to 1.92 rand after some of its Mooiplaats colliery workers started a legal strike after rejecting a 22 percent wage increase.

World No. 4 producer Gold Fields also said an illegal strike at its KDC West mine had spread to a separate operation. Its shares ended 1.5 percent lower at 105.43 rand.

Exxaro, African Rainbow and Anglo American also fell by over 1.5 percent after Citigroup cut their ratings to "neutral" from "buy".

Not at resource firms suffered the investor drought. Palabora Mining jumped over 18 percent to 86.49 rand after news that Rio Tinto would be divesting from South Africa's largest copper producer. It was not immediately clear if Rio planned to sell the stake to another investor.

Trade was robust, with 169 million shares changing hands on the bourse. Volume on the All-share has averaged 176 million shares a day over the last three months, according to Thomson Reuters data.

Source: http://news.yahoo.com/african-stocks-down-resources-firms-hammered-153608159--finance.html

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