South African stocks tumbled to a three-week low, following a slide in commodity prices, as China’s efforts to stop a stock market crash and Greece’s vote against austerity shook confidence in global growth.
The FTSE JSE Africa All Share Index dropped for a second day. The gauge’s moving average convergence-divergence, or MACD, is within five points of falling below the signal line, which would create a so-called death cross that some technical analysts say is a sign to sell. The rand weakened against the dollar to the lowest level since June 9 on a closing basis.
South Africa has the world’s biggest reserves of platinum, chrome ore and manganese and also produces gold. The Bloomberg Commodity Index fell 2.1 percent on Monday, the most since Feb. 4. Greek voters rejected more spending cuts and tax increases, taking the country to the brink of financial failure. China, the world’s top energy, grains and metals consumer, is seeking to restore investor confidence after the Shanghai Composite marked the steepest three-week stock plunge since 1992.
“Where we’re most vulnerable is the commodities side,” David Shapiro, a director at Johannesburg-based Sasfin Securities, a brokerage, said by phone from Johannesburg. While Greece is weighing on the market, “the one that concerns us more than anything has been the massive sell-off and decay we’ve seen in mining stocks,” he said.
The all-share index dropped 1.1 percent to 51381.22 by the close in Johannesburg as 94 stocks fell, 61 rose and 15 were unchanged. Naspers Ltd., which owns a stake in Chinese Internet operator Tencent Holdings Ltd., was the biggest drag on the market, sliding 4.7 percent. Sasol Ltd., the world’s largest producer of motor fuel from coal, decreased 4 percent as Brent crude slumped below $60 a barrel.
The 17-member FTSE/JSE Africa Mining Index declined 0.8 percent to the lowest since March 2009, with eight securities in the measure falling to their lowest in at least 52 weeks. BHP Billiton Plc lost 1.1 percent and Anglo American Plc declined 1.4 percent to the lowest since April 2009.
The rand weakened as much as 1.2 percent to 12.4591 per dollar, its lowest since June 16. It was trading 0.8 percent down at 12.4145 as of 5:16 p.m in Johannesburg. Yields on government rand-denominated bonds due December 2026 rose one basis point to 8.27 percent.