South Africa’s benchmark stock index fell to the lowest since July 2013 after President Cyril Ramaphosa’s declaration of a national state of disaster over the coronavirus outbreak stoked investor concern about its impact on an already fragile economy.
The president announced tough measures Sunday to stem the spread of the virus locally, including halting flights and shutting schools, and said the government was finalizing a crisis package.
An emergency cut in the U.S. Federal Reserve rate, as well as those by other central banks to try to stem the impact of the virus, only accelerated the sell-off sweeping through global equities. The FTSE/JSE Africa All-Share Index ended down 8.3% after sliding by a record 12% at the low point of Monday’s session.
“The JSE is taking cues from global markets which will also be reacting to the U.S. Fed cut that only increased fear,” Nolwandle Mthombeni, an analyst at Mergence Investment Managers, said by email. “There additionally will be some local investors worried about our economy after the president’s speech last night.”
Naspers Ltd., South Africa’s biggest stock, fell 8.6 to weigh most on the overall market, while heavyweight Richemont declined 7.9%. Just seven of the benchmark’s 160 members managed gains.
General retailers fell the most since December 2015 as concerns over the impact of the virus on spending combined with a dismal reading of consumer confidence. Gold miners at one point dropped more than 20%, the most on record, before paring declines.
“I expect there will be more negative days than positive over the next few weeks as further data comes out that confirms growth slowdown,” Mthombeni said.