MARKET WRAP: JSE falls the most in two years as SA’s woes mount

Disappointing local economic releases and a return of market fears around Turkey’s financial crisis put the JSE under serious pressure on Wednesday.

The local bourse was buffeted by a cocktail of corporate and economic news, including downbeat retail sales data, a warning from ratings agency Moody’s, as well as a steep fall by market heavyweight Naspers.

The all share lost 3.41% to 55,646.2 points, while the top 40 lost 3.76%. Gold miners slumped 7.9%, platinums 4.38%, industrials 3.8% and banks 3.34%.

Naspers, which makes up 20% of the all share, fell 8.22% to R3,060.88 after its associate Tencent reported second-quarter earnings that were below market forecasts.

Local retail sales data was also downbeat, growing 0.7% year on year in June, well below economist’s forecast of 2%. Along with recent downbeat economic releases, it now seems likely SA entered a technical recession in the second quarter, FNB senior economic analyst Jason Muscat said.

Moody’s, meanwhile, cautioned that the government’s current economic growth forecasts were overly optimistic, as were its plans for fiscal consolidation.

Global market focus was on events in Turkey, after that country decided to up the ante in its dispute with the US by leveling additional tariffs on US goods.

Metals were sharply sold off, with the spike in risk coming even as markets begin digesting the economic effects of the trade war in China, analysts said. Recent Chinese data has also disappointed, with growing fears that its economy is slowing despite stimulus efforts, reported Dow Jones Newswires.

Diversified miner Anglo American slumped 6.02% to R280.48, BHP 3.71% to R297.97 and Glencore 3.27% to R55.37.

Kumba Iron Ore plummeted 9.67% to R263.31.

Gold Fields crashed 10.85% to R37.30, having announced on Tuesday it was planning job cuts at its loss-making South Deep mine.

Rand hedge AB InBev gained 2.82% to R1,427.14.

FirstRand fell 4.75% to R62.20.

Shortly after the JSE closed the Dow had lost 1.03% to 25,039.31 points, while in Europe the CAC 40 was off 2.01%, the DAX 30 1.76%, and the FTSE 100 1.77%.

At the same time, platinum had fallen 4.63% to $764.23 an ounce and gold 1.37% to $1,177.54. Brent crude was 2.31% lower at $70.51 a barrel.

The top 40 Alsi futures index fell 3.23% to 49,770 points. The number of contracts traded was 36,267 from Tuesday’s 22,882.