S.Africa gold stocks drop but banks keep index on even keel

Tue May 7, 2013 11:48am EDT

* Top-40 index marginally lower

* Spot gold prices weigh on bullion producers

By Benon Oluka and Zandi Shabalala

JOHANNESBURG, May 7 (Reuters) - South African stocks broke a three-day rise on Tuesday, weighed down by share price drops at gold companies such as Gold Fields as investors nervously await economic data from top metals consumer China.

Spot gold prices fell further as the metal's appeal as an alternative investment faded after equity markets rose on prospects of sustained central bank stimulus.

The Top-40 index edged down 0.03 percent to 35,188.43 while the All-share index was 0.08 percent lower at 39,797.88.

"Gold stocks are the major losers of the day with the bullion price coming under a bit of pressure ... which has dragged down resources," said Nedbank Private Wealth's Andrew Brynson.

Gold Fields was 3.6 percent lower at 61.53 rand and bigger producer AngloGold Ashanti dropped 2.7 percent to 166.94 rand.

No. 1 platinum producer Anglo American Platinum lost 2.9 percent to 335 rand, while Impala Platinum fell over 2 percent to 115.45 rand.

Investors are now keeping an eye on diversified companies such as African Rainbow Minerals, which rose 3.5 percent to 176 rand.

"We shy away from the single commodity type of company," said Martin Lentsoane, a trader at Lehumo Capital.

"It's a sector that is going to remain volatile and we are aware of that. And we are going to trade it very carefully. We don't put all eggs in one basket if something happens negatively in South Africa."

MTN, Africa's leading mobile telecom company, fell over 2 percent after the Ivory Coast government named it as one of five companies that risk losing operating licences due to poor levels of service.

Hospital group Life Healthcare extended losses, bleeding 3 percent after the government said it would launch an investigation into the private health industry. Smaller competitor Netcare lost 1.7 percent.

Financial companies such as Standard Bank and FirstRand countered the losses, gaining ground amid signs that global central banks will remain supportive of growth.

FirstRand rose 1.8 percent and market leader Standard Bank added 1.2 percent to 113.11 rand.

Trade was fairly robust with 222 million shared being traded, according to preliminary data. Decliners outnumbered advancers 160 to 130 while 66 shares were unchanged. (Editing by Helen Nyambura-Mwaura)

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