South Africa’s benchmark stocks gauge dropped for a fourth day as the U.S.’s budget impasse continued, boosting the risk of a debt default and damping appetite for emerging-market assets.
The 165-member (JALSH) FTSE/JSE Africa All-Share Index fell 1.1 percent to 42,790.49 by 3:12 p.m. in Johannesburg with more than two stocks declining for every gainer. The streak of losses was the longest since the four days to June 24. The six-member gold-mining index slumped 2.5 percent, with all stocks down. South Africa is the world’s sixth-largest gold producer and prices for the precious metal dipped a second day.
The U.S. government entered the ninth day of a partial shutdown, with less than a week before its borrowing authority lapses on Oct. 17, leading to a possible default on the world’s largest government debt pile. The MSCI Emerging Markets Index fell 0.4 percent, the most since Sept. 30 on a closing basis.
“The selloff is happening on the back of the uncertainty associated with the U.S.’s potential technical debt default,” Rudi van der Merwe, Standard Bank Group Ltd.’s head of stockbroking in Johannesburg, said by phone today. “The closer we get to Oct. 17, the more restless and volatile the market will become.”
Sibanye Gold Ltd. (SGL), the South African producer spun off from Gold Fields Ltd. this year, slumped 5.5 percent to 12.28 rand. AngloGold Ashanti Ltd. (ANG), the world’s third-largest miner of the metal, fell 2.9 percent to 126.49 rand, heading for its lowest close since Sept. 18. Cie. Financiere Richemont SA, the world’s biggest jewelry marker, led the declines on the all-share gauge, retreating 2.2 percent to 97.70 rand. Naspers Ltd. (NPN) decreased 2.8 percent to 915.50 rand.
The spot price of gold dropped 0.8 percent, the second day of losses, to $1,308.47 per ounce by 9:22 a.m. in New York. The metal extended its slide this year to 22 percent.
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