Clear signs that the global economy is slowing and that major economies may be headed towards recession put pressure on risk assets on Wednesday, with the JSE slipping to its worst level since February.
In a day of weak economic data, beginning with news that Chinese industrial output growth was at its slowest pace in 17 years in July, UK inflation came in higher than expected, German GDP shrank 0.1% in the second quarter, and eurozone industrial output fell more than twice as fast as the market expected, down 2.6% year on year in June.
US bond markets also flashed a recession warning, with the yield on the 30-year US treasury, which moves inversely to its price, falling to a record low as investors sought safety in longer-dated debt.
The JSE tracked global markets weaker, losing 2.11% to 54,029.4 points while the top 40 fell 2.37%. The all share earlier dropped as much as 2.3%.
Industrials relinquished 2.67% and banks 2.45%. Gold miners jumped 5.77%, partially recovering from Tuesday’s 8.98% plunge.
Shortly after the JSE closed, the Dow was down 2.09% to 25,730.57 points, while in Europe, the FTSE 100 had lost 1.58%, the CAC 40 2.35% and the DAX 30 2.15%.
The rand was 1.9% weaker at R15.4206/$.
Gold was up 1.06% to $1,517.28/oz while platinum had fallen 0.68% to $849.18. Brent crude was 3.14% lower at $59 a barrel.
Local economic data was a little more upbeat, with retail sales growing 2.4% year on year in June, a little faster than the expected 2.2%.
SA should avoid a recession in the second quarter, but along with more the upbeat data, a weaker rand was reducing chances of the Reserve Bank giving SA a second interest-rate cut in 2019, Capital Economics senior emerging-markets economist John Ashbourne said in a note.
Forward rate agreements now pointed to the Bank delaying another interest-rate cut until early 2020, Ashbourne said, adding, however, that he held the nonconsensus view SA would still see another cut in September.
Naspers slumped 3.96% to R3,354.10, despite a 1.8% rise in Hong-Kong listed subsidiary Tencent earlier. Tencent, of which Naspers holds 31%, reported a better-than-expected 35% rise in quarterly net profit to end-June.
Car component manufacturer Metair was flat at R22.47, having said earlier that revenue rose 19% in the six months to end June.
Aspen Pharmacare gave back 6.66% to R69.55. It said earlier that it had settled with UK competition authorities on an £8m payment related to alleged anticompetitive conduct related to corticosteriod drug supply in the UK.
Exxaro lost 5.73% to R137.44 It said earlier that interim headline earnings per share for the period to end-June were expected to rise between 35% and 47% year on year, but earnings before interest, taxes, depreciation and amortisation (ebitda) were expected to fall between 13% and 25%.
Kumba Iron Ore plunged 8.54% to R414.96.