The blue-chip Top40 index also fell, ending the session 2.23 percent in the red with financial stocks taking a particularly hard hit.
The local equities were mainly hamstrung by developments surrounding Brexit, Italy’s budget and Saudi Arabia’s handling of the murder of Jamal Khashoggi.
The key banks index shed 2.6 percent to 8 062 points, 25 percent weaker than a year's high of 10 848 points.
Analysts warned that the market should expect a further hammering in the next few months as local and global factors remained vulnerable.
Nedbank said in a research note that the falling demand for credit would remain a headwind for South Africa's banks.
Mehul Daya and Neels Heyneke, analysts at Nedbank, said: “If our view that global banks will remain under pressure is correct, we can expect another wave down in local banks to 7300 points (Bank index), which should be a good buying opportunity.”
South Africa’s big banks all closed yesterday’s session weaker, with Standard Bank down 3.66percent.
Nedbank closed 2.84percent weaker at R227.11 while Absa eased 2.55percent to R140.50 and FirstRand declining 2.13percent to R59.83 and Capitec 1.13percent to R988.
Old Mutual Multi-Managers said year-on-year returns would remain bleak in the next few months.
Its chief investment strategist said the performance of the local equity market this year was dire.
“The local market stormed ahead in the first three weeks of January to an all-time high on the FTSE/JSE all share index of 61686 points,” Mohr said.
“But since then everything seems to have gone wrong. The market is down 16percent from that high point, and the index is back where it was in July 2017.”
JSE heavyweight Naspers has fallen nearly 22percent on a yearly basis, mainly due to the more than $150billion (R2.15trillion) drop in Chinese internet giant Tencent this year.
Nkareng Mpobane, an analyst at Ashburton Investments, said big names on the JSE had fallen substantially below long-term valuations.
“The South African overall equity market has shed more than 20percent from its highs at the beginning of the year in dollar terms, a similar sized drop to the ‘Nenegate’ slump of 2015,” Mpobane said.
Only Sasol, BHP Billiton and Anglo American have remained up on the back of a surge in the rand-oil price and a recovery in commodity prices.
FNB Wealth and Investments said that the rout could lead to companies such as Clover following Verimark in seeking a delisting from the stock market.