Johannesburg - South African stocks fell for the biggest weekly decline in three, joining an emerging-market selloff from Asia to Latin America as disappointing earnings and a debt default weighed on riskier assets.
The 164-member FTSE/JSE Africa All Share Index dropped 0.9 percent to 50,917.78, the lowest since June 27, and extending its slide this week to 1.2 percent.
The Johannesburg gauge decreased in line with the MSCI Emerging Markets Index, which dropped 1.9 percent this week, the worst performance since March.
Latin American stocks slipped after Argentina missed a deadline for a $539 million (R5.7 billion) bond interest payment and shares in Asia retreated after Samsung Electronics reported earnings that missed estimates.
Decliners included transport firm Grindrod which skidded 4.25 percent to 25.03 rand after the company warned interim earnings will likely fall between 30 and 35 percent.
Grindrod said the expected earnings slide was due to depressed shipping markets, the closure of its commodity trading business and strikes in South Africa, making it the latest corporate victim of a wave of labour unrest that has included an historic five-month stoppage in the platinum sector.
MTN, SABMiller and BHP Billiton were also big decliners today.
There’s “a bit of a global profit-taking that would be taking risk off the table after a very strong first half of the year,” Garth Mackenzie, founder of Johannesburg-based TradersCorner.co.za, said by phone today.
“SAB, MTN specifically, are very much emerging market-focused.”
But overall the market, which has scaled successive record peaks this year despite sluggish domestic economic growth, was moving to global flows and sentiment.
“This is not a reflection of investors thinking local issues, it is a reaction to international developments and data,” said Christie Viljoen of NKC Independent Economists.
The market trimmed losses in line with peers elsewhere after the US jobs data was released, but then fell again, also a reflection of global volatility.
The Top-40 benchmark index shed 1.06 percent to 45,733 while the broader All-share index stumbled 0.93 percent to 50,917.78. This was the third straight day of losses for the market.
Decliners outnumbered advancers 190 to 103 with 53 issues unchanged, according to preliminary bourse data.
Foreigners sold 1.31 billion rand of South African shares yesterday, the most since June 23 and the second day of outflows this week, according to data from the Johannesburg Stock Exchange.
The all-share index gained 10 percent this year, reaching a record high on July 29.
“Markets have been on a very strong upward trajectory for the whole of the year, and were very overbought,” Mackenzie said.
“At some point we were expecting a correction.” - Bloomberg News and Reuters