Iron-Ore Stocks Rally After Sale: Johannesburg Mover
(Corrects location of analyst in third paragraph.)
Assore Ltd. (ASR), a South African company that is joint owner of iron-ore and manganese producer Assmang Ltd., gained the most in more than seven months on speculation the stock’s decline was overdone.
Shares in the company jumped as much as 6.4 percent, the most on an intraday basis since Aug. 23, and were 5.6 percent higher at 289.02 rand by 11:24 a.m. in Johannesburg. Kumba Iron Ore Ltd. (KIO), owner of Africa’s biggest mine for the metal, pared four days pf losses and advanced 1.5 percent to 448.90 rand.
“Iron-ore stocks are having a relief day,” Ryan Wibberley, a trader at Investec Asset Management, said by phone from Cape Town. “They’re rallying from an oversold position.”
Kumba’s 14-day relative strength index was below 30 for a fifth day while Assore’s was 30 for the first time in seven days. A reading below 30 signals to technical analysts a security is undervalued and poised to rebound.
The increase in these shares follows a jump in Australian iron-ore stocks, Wibberley said. Atlas Iron Ltd. (AGO), based in Perth, rose 9.2 percent, the most almost four months, to A$1.125. Fortescue Metals Group (FMG), the continent’s third-largest producer of the metal, surged 7.3 percent, the most in more than six months, to A$3.84.
“The iron-ore sector has taken a beating lately,” Wibberley said.
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