The JSE fell the most in more than a year as global markets slumped after the identification of a new variant of Covid-19.
On Thursday, South African scientists announced that a newly identified coronavirus variant — B1.1.529 — had been detected in the country, which is thought to be behind the rising number of new cases in Gauteng.
While leisure and life insurance stocks tumbled, the JSE banks index also took a pounding, falling the most since late March 2020, when SA went into its first hard lockdown.
“Risk assets are getting pummelled at the end of the week as the new Covid-19 variant sparks fears of new restrictions and lockdowns,” said Oanda senior market analyst Craig Erlam.
The UK put SA back on the red list on Thursday, restricting travel between the two countries and European Commission chief Ursula von der Leyen said on Friday the EU also aimed to halt air travel from the region.
“The most worrying thing about the new strain at the moment is how little we know about it, with early indications being that it could be more problematic than Delta. The biggest fear is that it will be resistant to vaccines and be a massive setback for countries that have reaped the benefits from their rollouts,” said Erlam.
The JSE all share fell the most since late October 2020 on Friday, down 2.75% to 68,614 points. The top 40 fell 2.58%, while travel and leisure stocks, life insurers and banks plunged 9.1% , 8.05% and 7.02%, respectively.
Absa fared worst of the big four banks, tumbling the most since Covid-19 hit SA, down 8.91% to R124.95. This was its ninth biggest fall since it listed about 22 years ago. Nedbank lost 7.87% to R152.64, Standard Bank 7.31% to R122.94 and FirstRand 6.96% to R53.85.
The rand wasn’t spared the carnage, reaching an intraday worst of R16.36/$, a level last seen more than a year ago. At 6pm it had fallen 1.22% to R16.2163/$, 2.13% to R18.3526/€ and 1.29% to R21.6291/£. The euro gained about 1% against the dollar to $1.1314, its biggest rise since December 1, 2020, in the aftermath of the fiercely contested US presidential election.
Gold gained 0.44% to $1,796.95/oz, while platinum fell 3.4% to $968.31/oz and Brent crude plummeted 10.3% to $73.71 a barrel, its biggest fall since mid March 2020.
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