* Market to watch U.S. earnings season
* Top-40, All-share add 0.21 pct
JOHANNESBURG, Oct 10 (Reuters) - South African shares turnedpositive for the first time this week but Gold Fieldsand other bullion mining firms took a beating from a recovery inthe local currency.
Absa , the South African bank majority owned byBarclays , fell 2.8 percent to 134.60 rand. A blackinvestment group said it had sold a 3.4 percent stake in thebank.
The Top-40 index gained 0.21 percent 32,008.14 andthe All-share went up by a similar margin to 36,147.62.
"Overall, quite cautious trade and a little bit of strengthcoming back into the rand," said Nick Kunze, a director atTerrassen Capital Management in Johannesburg.
"Gold shares are under pressure because the rand wasstrengthening."
The rand has recovered a little over 3 percentsince hitting a near 3-1/2 year low on Monday, when it was byinvestor concern over widening labour unrest.
Central bank governor Gill Marcus also warned on Wednesdaythe economic outlook for Africa's biggest economy wasdeteriorating rapidly, with the ongoing strikes likely to leadto job losses.
Johannesburg's gold index lost nearly 1 percentwith Gold Fields dipping 1.5 percent to 106.76 rand and smallerproducer DRD Gold falling 2 percent to 5.71 rand.
A stronger rand is a negative for gold miners because theysell gold for dollars but pay costs in rand.
Mining shares were bolstered by positive signs that thelabour fracas, which has spread to other segments of theeconomy, may soon dissipate with pay deals under discussion,Kunze said.
The market would now turn its attention to U.S. companyresults as the earnings season begun on Tuesday with Alcoa
casting a shadow over the market by forecasting a dip indemand from China, the world's second-largest economy.
"For the next three weeks, we will be driven by offshoremarkets," Kunze said.
Johannesburg-listed retailers were back in vogue with Mr.Price and Woolworths both adding over 3percent to 119.75 and 60.75 rand respectively.
Trade was robust with more than 180 million shares changinghands. A total of 159 companies lost value and another 125gained some ground.
(Reporting by Helen Nyambura-Mwaura)
Keywords: SAFRICA STOCKS/