The JSE tracked weaker global markets on Monday on concerns that rising Covid-19 cases and the spread of a contagious variant in some countries would slow the global economic recovery.
The local bourse fell the most in a week as renewed fears over Covid-19 outbreaks in the US and Europe resurfaced, with the spread of the Delta variant of particular concern.
Mining stocks were the worst performers in a session that saw every industry sector drop. Precious metals and industrial metals indices both fell the most in a week.
US officials have warned about a sharp acceleration in infection rates among those who are unvaccinated, while the UK lifted restrictions on Monday, despite infections rising there.
“Increasing infection rates in developed countries have spurred risk-off in markets, with the Delta Covid-19 variant spread triggering a flight to safety as global economic concerns intensify,” Oanda senior market analyst Edward Moya said.
“Global investors are growing anxious and selling stocks, commodities, and even cryptocurrencies. With the coronavirus surging across both advanced and developing nations, the bond market is delivering a one-way trade, lower global bond yields.”
The JSE all share fell 2.51% to 64,860.17 points and the top 40 slipped 2.61%. Precious metals dropped 4.17%, industrial metals 3.45%, resources 3.31%, financials 2.57%, banks 2.43% and industrials 1.97%.
Sibanye-Stillwater led the losses in the precious metals sector, falling the most since February 2021, down 6.50% to R55.79.
In the industrial mining sector, Glencore shed the most among its peers, falling the most since April 2021, down 4.15% to R58.92.
At 5.25pm, the Dow Jones industrial average was 2.33% weaker at 33,878.89 points. In Europe, the FTSE 100 lost 2.37%, France’s CAC 40 2.90% and Germany’s DAX 2.81%.
The rand weakened along with its emerging-market currencies, reaching an intraday worst level of R14.5284/$. At 5.04pm, it had weakened 0.28% to R14.4967/$ and 0.3% to R17.1202/€, while it had strengthened 0.20% to R19.8308/£. The euro was unchanged at $1.1807.
“The Covid-19 Delta variant, which spread rapidly in SA and in some other emerging markets, continues its spread around the world, negatively affecting financial market sentiment as well, given the highly contagious nature of this new strain,” said Investec chief economist Annabel Bishop.
“The rand has seen some volatility from different factors. With rising Covid-19 numbers impacting emerging market currencies in particular — SA’s are still moderating, SA would lose out by lagging further behind global recovery now as well, which will tell on the rand in future.”
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