JSE loses 1% as fear grips global markets

The JSE followed global markets at the opening on Thursday, with the all share shedding more than 1% as global challenges kept investors on the edge.

Local banks and retailers were early casualties as the rand hit R14.5682 to the dollar from R14.5563.

The sell-off in local bonds continued after finance minister Tito Mboweni’s medium-term budget policy statement on Wednesday. The R186 was last bid at 9.43% from 9.31%.

The Dow plunged 2.41% on Wednesday as investors reacted to weaker-than-expected company earnings and concerns around future economic growth on weak data.

The Dow is down 7.09% for October and 0.55% for 2018.

The FTSE 100 was 0.83% lower at the opening on Thursday. The Nikkei 225 weakened 3.72% and the Hang Seng 1.71%.

While buyers returned to the market on weakness earlier in the week, there was little sign of that on Wednesday. 

New home sales in the US fell to a two-year low in September as higher prices and mortgage rates began to hit demand. Last week also showed declines in new home-building permits while sales of existing homes fell to a near three-year low in September. 

Oanda analyst Stephen Innes said US equity markets were looking fragile and on the verge of crumbling. “The air is so thick with a sense of foreboding that you can cut it with a dull butter knife.”

Risk-off sentiment has firmly gripped markets, based on views that US growth has peaked ahead of a looming trade war between the US and China. In addition, the Fed has said its “accommodative” monetary stance is something of the past, ahead of expected further hikes in December and next year.

Europe’s economy is clearly slowing down with Wednesday’s  composite flash purchasing managers index (PMI) falling to a 25-month low, amid ongoing uncertainty in the UK and Italy.

At 9.35am the all share was 0.87% lower at 50,436.20 points and the top 40 lost 0.83%.  Banks dropped 1.56%, platinums 1.33%, general retailers 1.3%, financials 1.18% and industrials 1.11%. The gold index added 2.14%.

Anheuser-Busch InBev plummeted 8.6% to R1,096.92. The group said revenue rose 4.5% in the latest quarter but volumes only 0.2%.

Standard Bank lost 1.55% to R156.04.

Shoprite shed 2.16% to R183.45 and Woolworths 0.56% to R47.83.

Nepi Rockcastle lost 1.07% to R122.02.

Naspers was down 1.53% to R2,535.55.

Spur lost 2.13% to R23.