South African stocks fell the most in a week after Federal Reserve Chairman Ben S. Bernanke said policy makers may reduce monetary stimulus that has fueled demand for emerging-market assets.
The benchmark 166-member FTSE/JSE Africa All-Share Index slid 3.1 percent, the most since June 11, to 39,536.08 by the 5 p.m. close in Johannesburg. For every stock that gained on the gauge, more than five declined. The MSCI Emerging Markets Index fell 4 percent, the most since September 2011, to 908.91.
BHP Billiton Plc, the world’s largest mining company, fell 3.5 percent, the most since April 17, while Naspers Ltd., Africa’s largest media company, dropped 5.4 percent, the most in 22 months. The Fed will probably moderate its stimulus measures, known as quantitative easing, later in 2013 and halt bond purchases around the middle of next year as long as the world’s largest economy performs in line with projections, Bernanke told reporters in Washington yesterday.
“The JSE, like its global peers, is digesting a future with less QE,” Ryan Wibberley, the head of equity dealing for frontier and emerging markets at Cape Town-based Investec Asset Management, said in an e-mailed response to questions. “Global markets are reacting negatively to a more hawkish tone from the Fed.”
Gold Fields Ltd. slid 4.2 percent, Sibanye Gold Ltd. lost 11 percent, the most in four months, and Harmony Gold Mining Co Ltd. fell 3.3 percent. The spot price of gold dropped a fourth day, declining as much as 4.8 percent to $1,286.20 per ounce, the lowest on a closing basis since September 2010.
Investors are pulling money from emerging markets at the fastest pace in two years as slowing economic growth and the prospect of less global stimulus sink stocks, bonds and currencies from India to Brazil. More than $19 billion left funds investing in developing-nation assets in the three weeks to June 12, the most since 2011, according to EPFR Global. Foreign investors dumped 2.3 billion rand ($223 million) of South African bonds yesterday, according to JSE Ltd. data.
The rand weakened 0.7 percent to 10.2549 per dollar by 5:31 p.m. in Johannesburg, extending its loss this year to 17 percent, the worst performer among 24 emerging-market currencies tracked by Bloomberg. Yields on 10.5 percent government bonds due December 2026 surged 38 basis points, or 0.38 percentage point, to 8.27 percent, the highest since June 10.