South Africa's rand advanced to four-year highs against a battered euro on Monday and stocks inched up, supported by mining shares.

The blue-chip Top-40 index rose 0.36 percent to 28.316.93 while the broader All-share added 0.32 percent to 31,732.52.

Broader gains were limited as investors cashed in RMB Holdings and other recent advancers.

The euro, the currency of South Africa's main trading partner, has been hit by ongoing worries about debt problems in the region and is seen under pressure in the near term.

The rand hit 8.8947 in the session, its strongest since August 2006 and was last trading at 8.92 by 1545 GMT. Further rand gains are possible if it closes below 9.00.

Against the dollar, the rand stood at 6.85, off a session low of 6.89, from Friday's close of 6.8615.

"It's been fairly range bound. It tried the topside technical level around 6.89/90 level but that held," said a Johannesburg-based trader, adding the rand reversed its losses as the euro came of its session lows and gold rose.

Traders see the rand staying in the 6.82-6.92 range, with little to push it outside that band as trading has thinned out during holidays. A break of 6.92 will prompt further losses.

Shares of MTN Group, Africa's largest mobile phone operator, edged up after it said it had appointed a veteran senior executive as its next CEO.

MTN rose 0.3 percent to 127.36 rand. The company named Sifiso Dabengwa, currently chief operating officer and an 11-year veteran of the company, to replace Phuthuma Nhleko, who is due to step down at the end of March.

Miners climbed, with AngloGold Ashanti, the world's third-largest gold miner, adding 1.1 percent 332.82 rand.

Shares in Gold Fields, the world's fourth-largest gold miner, added 0.9 percent to 122.79.

Strength in commodity stocks would likely underpin the South African equity market in the coming year, said Mitchell Gannaway, a trader at Thebe Security.

"I think it's going to be a commodities year next year. The retailers had a really good year this year, but Ithink that's going to die out and there's going to be more of a focus on commodities."

Gold, which is seen as a less-risky asset, will likely continue to benefit from continued dollar weakness, he said.

Gold rose for a second day, overcoming the weakness in the euro after a warning from the European Central Bank on the region's finances encouraged light safe-haven flows into the metal.

Shares of investment firm RMB Holdings fell to profit-taking, however, after rising nearly 7 percent in the previous two sessions, after saying i 

Government bonds firmed, with the yield on the 2015 issue down three basis points to 7.42 percent and that on the 2026 note falling 3.5 basis points to 8.415 percent.

Bonds have gained significantly this year as foreign inflows into local paper have tripled to 66 billion rand this year.

Also supporting the bond market were some expectations that another rate cut in the first quarter of next year was possible to support a weak recovery. Rates have fallen by a cumulative 650 basis points since December 2008.

Source: Reuters