Reuters reported that shares in ArcelorMittal's South African unit jump nearly 7% as traders bet the steel maker resolve pricing dispute with Kumba Iron Ore while technical factors suggest the stock was due for a rebound.
As per report, ArcelorMittal South Africa gains 6.93% at ZAR 76.99, a day after government said the company and Kumba were committed reaching an agreement.
Mr Sasha Naryshkine, a trader at Vestact, said that "The volumes tell you something unless the government is going to get heavy with Kumba Iron Ore and say come to some sort of agreement. That might be the reason."
In addition, the company's slow stochastic shows that ArcelorMittal reached oversold levels in the previous session. Analysts who look at the momentum gauge consider any value under 20 as being oversold.
Mr Ferdi Heyneke, portfolio manager at Afrifocus Securities, said that "The share price has seen a big drop. It's a classic case that it was just overdone and you've got some bargain hunters coming in."
