JOHANNESBURG – The JSE Africa All Share index fell 1.72 percent and the JSE Top 40 index was down 1.91 percent by lunchtime on Monday as heavyweights Naspers, Richemont SA, BHP and Anglo American's stocks retreated.
Naspers share price, with a 14 percent weighting on the benchmark index, declined 2.65 percent to R2 385.03, while Richemont, the luxury goods producer, fell 2.232 percent to R109.87.
Mining houses BHP took a 2.01 percent hit to R325.97 and Anglo American declined 1.66 percent to R345.78. The four companies make up at least 36 percent of the index.
The index of bank stocks also fell for the third day by 1.62 percent on Monday as South African banks are bracing for the biggest workers’ strike in 99 years. The banks index also fell as emerging-market currencies weakened while investors monitor the latest developments in trade talks.
According to the JSE, foreign investors were net sellers of South Africa stocks for the fourth day on Friday, disposing of R3.28 billion worth of shares.
The dumping of South African stocks puts pressure on the rand, government financing of its twin deficits and liquidity for the JSE.
The index of gold producers advanced 2.26 percent amid soaring bullion prices as the gold price rising 19.72 percent to $1 521.81 an ounce.
The rand weakened to R14.84/$ after nearly touching R15/$ at its close on Friday, as the ramp-up of tensions in the Middle East and the cautious stance of the Fed afflicted markets.
Investec’s economist Annabel Bishop said the outlook for the global economy and markets had become cloudier, as rising uncertainty negatively impacts risk assets, with concerns in particular over economic growth in 2020.
“The slowdown in the pace of global economic activity looks likely to continue, instead of the recovery that was indicated by key institutions, including the IMF, earlier in the year,” Bishop said.
“The rand is likely to continue to remain volatile, with September a month that can see a lot of churn, and with the risk that slower global growth sees commodity currencies such as the rand weaken further.”