JOHANNESBURG (Reuters) - South African stocks ended higher on Thursday as gold mining shares surged thanks to a weaker rand and growing views that the sector is in an oversold territory.
Mining stocks have underperformed in recent months as investors fret over the sector's volatile relationship with labour after a wave of costly wildcat strikes since last year.
Gold Fields topped the gainer's list on the benchmark index, rising 7.6 percent to 74.72 rand, booking its biggest daily percentage rise in about three years.
"Gold mining shares really got massively hammered recently so we are seeing a lot technical buying support," said Bernhard Grobler, head of stockbroking at Investec.
The market is unfairly pessimistic about the gold sector's growth prospects, according to Thomson Reuters StarMine.
According to StarMine, which uses a blend of its own models and analyst estimates, Gold Fields should be trading at about 120 rand, or 60 percent above its current level.
Sentiment: Strong Buy