Sarah Bullen, Johannesburg | Monday, 7.00PM
THE Johannesburg Stock Exchange had a “disastrous” day on Monday, with stock falling across the board and the market losing 1,6% of its value on the day.
The market remains on tenterhooks after international credit rating agency Moody’s last week put South Africa on a revolving credit alert, which could precede a drop from investment grade for the country.
Fears intensified on Monday after a significant drop in Asian markets with Japan’s Nikkei Index bumping through a terrible day, to lose 417 points, 2,54%.
Dealers said there is also a feeling that Wall Street is due for a correction after its good run.
Continuing pessimism over South Africa’s high interest rates were again sparked on Monday when Absa raised its prime rate to 24% in line with the other major banks. Accordingly, banks and other interest rate-linked stock took a knock, with banking stock falling 2%.
Both financial and industrial stock registered heavy losses, with the financial index dropping 1,4%, 169 points, to close on 11867 while the industrial index fell 1,52%, 124 points, to 8040. Gold shares came under heavy pressure, with the index falling 26 points, to 938.
Bonds ended weaker after a volatile day of tracking the rand. The R150 close at a 16,005% yield, off its previous close of 15,880%, while the R153 lost 10 basis points to weaken to a 15,870% from 15,760%. On the currency market, the rand lost ground against the dollar in early trade, tracking the falling Japanese yen. At 4.30pm the rand ended in the middle of its 12 morning band at R6,2120 to the dollar. At 4.30pm a pound cost 10c more than Friday’s rate, at R10,3640.