The JSE bled as a new Covid-19 variant found on home soil sent countries scurrying to close their borders to travellers from South Africa and surrounds and wreaked havoc in markets across the globe.
The selloff follows a warning from authorities that the new strain – B.1.1.529 – “has a big jump on evolution” and could potentially “spread very fast” and put pressure on the healthcare system “in the next few days and weeks”. The government also warned people against large gatherings involving alcohol as the country recorded a total of 2,465 new Covid-19 cases in the last 24-hour cycle, with 79% (1,950) recorded in Gauteng.
Reminiscent of market reactions in early 2020 when the pandemic was first spreading, investors fled to safe havens and dumped travel and hospitality stocks, pushing the All Share index off its 70k+ throne to end the day on 2.75% to 68,614.98 points.
The Covid mayhem also caused chaos in the commodity space, with all metals bar gold taking a pounding. Gold was trading above $1,800/oz, but has since fallen back to last trade at $1,786.89. Platinum and palladium were battered, with platinum hammered down 3.54% to $964.63 and palladium down 5.19% to $1,772.
Brent Crude has also had a red day with the oil down almost 7% on the day with a barrel costing $76.63. Sasol lost 7.29%.
Gold mining companies were the biggest beneficiaries, with Harmony (+6.75%), Gold Fields (+3.64%), DRD Gold (+2.92%), Anglogold (+2.59%) and South32 (+1.50%) all glittering.
Other likely beneficiaries of an impending lockdown were e-commerce and e-entertainment plays Naspers (+0.36%) and Prosus (+1.67%), but drugmakers Aspen and Adcock Ingram surprised on the downside, sliding 3.85% and 5.15% respectively.
Travel and hospitality stocks took a heavy beating, with City Lodge (-15.09%) and Tsogo Sun (-14.20%) shedding the most blood.
Alcohol counters AB Inbev (-2.61%) and Distell (-0.99%) also dropped.
Financial services counters, which in the past few days reported depleting reserves amid a steep rise in Covid-19 claims, also tanked. Momentum (-9.11%), Sanlam (-9.03%), Absa (-8.91%), Nedbank (-7.87%), Alexander Forbes (-7.74%), Old Mutual (-7.37%) and Discovery (-7.17%) all bled.
In the forex markets, the rand continued to fight from the back foot, reaching a high of R16.36 against the US dollar before settling at R16.21/$ at last count. “We have seen most of the other EMs fighting back hard against the US dollar, with the rand lagging behind them on the EM front. We expect renewed volatility in the market on Monday when the US will be back in full force,” comments TreasuryONE.
The forex trading house says risk-off is evident in the markets, with stock indices across the globe painted in red, “case in point is the Dow and S&P 500 which are down 2% at the start of the day”. “We expect markets to stay relatively muted in the evening session, with most of America taking a long weekend.”
Indicators as at 17:00
Currencies
USDZAR 16.2440
EURUSD 1.1289
EURZAR 18.3275
GBPUSD 1.3330
GBPZAR 21.6467
AUDZAR 11.5933
CADZAR 12.7096
CNYZAR 2.5395
ZARJPY 6.9872
CHFZAR 17.5408
USDAOA 592.73
Bonds and equities
R186 8.18%
US 10 Year 1.51%
JSE -2.71%
FTSE -3.09%
S&P 500 -1.70%
Commodities
Gold $1 799.80
Plat $968.29
Plad $1 746.47
Rhod $13 690.00
Irid $4 290.00
Ruth $588.00
Copp $9 629.50
Brent $76.55
Iron Ore 62.5% $94.33
Coal API4 $138.00
Gold ZAR R29 221.73
Plat ZAR R15 721.25
