JOHANNESBURG (Reuters) – South Africa’s stocks touched 3-1/2-month lows on Thursday in line with world equities after a sharp decline in Chinese exports revived concerns about the health of the world’s second-biggest economy.
The rand recouped some of its losses against the dollar, but still traded near the previous day’s four-week lows as investors fretted that Finance Minister Pravin Gordhan could be removed from his job over fraud charges.
The benchmark Top-40 index fell 2.31 percent to 44,006 points, while the All-Share index declined 2.04 percent to 50,495 points.
“The sentiment in world markets generally is quite negative … market is acting negatively to that China data,” said Cratos Capital equities trader Greg Davies.
China’s September exports fell 10 percent from a year earlier, far worse than expected, while imports dropped unexpectedly. [nL4N1CI2V7]
Persistent concerns over weak growth in the world’s biggest commodities consumer have weighed on demand for assets in regions exporting raw materials, such as South Africa.
The hardest hit shares were banks, with the main index there down 3.6 percent while the mining index fell 2.32 percent.
BHP Billiton slipped 3.59 percent to 206.69 rand after Citigroup downgraded the mining giant to “sell” from “neutral”
Platinum Producer Lonmin fell 5.52 percent to 32.51, while Impala Platinum was down 4.70 percent to 57.64 after the platinum price fell.
Trade was lively, with around 296 million shares changing hands, in line with last year’s daily average.
On the forex market, by 1705 GMT, the rand traded at 14.1850 per dollar, up 0.3 percent from its New York close..
The currency is still down 2.5 percent since Tuesday, when South African prosecutors ordered Gordhan to appear in court on Nov. 2, raising investor jitters about continuity of sound economic policy.[nL8N1CH1PG]
The move, which comes just two weeks before Gordhan is due to present his medium-term budget statement to parliament against the backdrop of stalling economic growth, could trigger a credit rating downgrade to “junk” by year-end.
“South Africa’s idiosyncratic risks are heating up,” Standard Bank analyst Walter de Wet said in a note.
“Besides the local political upheaval, commodities have, for now, turned against the rand.”
Government bonds ended firmer on the day, with the yield for the benchmark instrument maturing in dipping 2.5 basis points to 8.905 percent.
(Reporting by Nqobile Dludla and Stella Mapenzauswa; Editing by Hugh Lawson)