South African stocks ended sharply higher for the second day running on Tuesday, paced by miners on rising commodity prices.

Local mobile phone firm MTN Group remained the most heavily traded stock by value after it confirmed that it was in share price-sensitive talks with an Indian firm.

The JSE's broader all share index ended 2.01 percent higher at 31 929.090. Resources added 3.02 percent, while the gold and platinum mining indices were up 5.20 percent and 2.82 percent respectively.

However banks were down 0.80 percent and financials lost 0.62 percent, while industrials improved 1.71 percent.

The rand was bid at 7.55 to the dollar from 7.56 when the JSE closed on Monday, while gold was quoted at $881.70 a troy ounce from $867.13 at the JSE's last close.

Mining stocks were on the rise on the back of rising metal prices, easily concealing modest losses in suffered by banks and financials, traders said.

"Gold is right up there, oil remains strong. That is giving our mining stocks a big boost. The dollar price of gold is looking very attractive at the moment," said Ferdi Heyneke, a trader at Afrifocus Securities.

Rumoured takeover target MTN Group was among the blue chip's top gainers after the local cellular phone firm confirmed late on Monday that it was in price-sensitive talks with India's Bharti Airtel.

Shares in MTN rallied nearly 10 percent in early deals to set a new record intraday high of 165 rand, but pulled back at midday to close 6.67 percent higher at 160 rand for the first time in its 14-year history.

"MTN is engaged in discussions with Bharti Airtel Limited which, if successfully concluded, may have a material effect on the price of the company's securities. The discussions are exploratory in nature and may or may not lead to any transaction," the company said in a statement posted on the JSE's news service on Monday evening.

Telkom, the fixed phone line operator, rose 5.85 percent to 135.01 rand.

Among miners, AngloGold Ashanti soared 9.13 percent to 287 rand.

AngloGold Ashanti earlier reported a widening of its quarterly loss from 10.99 rand in the December quarter to 13.76 rand in the March quarter.

The company recorded a gross loss of R3.4-billion for the three months to end March, which represents a 30 percent widening of the gross loss of R2.4-billion reported for the three months to end December 2007.

In a separate statement, AngloGold Ashanti said that it would proceed with an approximate one-for-four renounceable rights offer, which would result in it issuing approximately 69.4 million ordinary shares at a minimum share price of 172 rand.

Gold Fields recovered 3.31 percent to 103 rand, after two days of sideways movement following last weekend's tragic accidents at its South Deep mine.

Analysts said South Deep, which was closed for safety inspections and investigations, was not critical to Gold Fields' fortune.

Harmony Gold climbed 2.02 percent to 91.10 rand.

On the resource index, Anglo American gained 2.16 percent to 520.50 rand and BHP Billiton added 2.34 percent to 288.10 rand.

Synthetic fuels maker Sasol climbed 5.88 percent to a new closing high of 468 rand, after earlier setting a record intraday high of 469.20 rand, as the oil price hovers around the historic $120 per barrel.

Paper maker Sappi leaped 4.57 percent to 109.80 rand. It earlier reported basic earnings per share of US 68 cents for the quarter ended March, up from 18 cents in the December quarter and compared with 25 cents in the March 2007 quarter. This brought basic EPS for the half year to US 86 cents from 38 cents a year ago.

Also in the news, electronics firm Altron inched up 12 cents to 37.57 rand after annual diluted headline earnings rose 33 percent to 327 rand per share.

I-Net Bridge