Friday January 23, 04:02 PM
S.Africa stocks slide on financials, rand tumbles
JOHANNESBURG, Jan 23 (Reuters) - South Africa's bourse fell on Friday, extending its losses to five consecutive days, dragged down by insurer Old Mutual (LSE: OML.L - news) and financial stocks, while the rand tumbled versus the dollar on risk aversion.
The rand fell as much as 3.7 percent against the dollar, touching fresh 5-week lows against the dollar as worries over corporate earnings fanned investors' risk aversion, sending them scuttling for 'safe currencies' like the yen and the greenback.
The Johannesburg Top-40 index of blue-chip stocks closed 1.56 percent lower at 17,526.02 points, while the wider All-share index lost 1.48 percent to 19,581.39 points.
'The market was driven down by negative U.S. sentiment and negative European economic data,' Roy Lamb, a trader at Investec Securities said.
Old Mutual dropped 9.15 percent to 7.25 rand, making it the hardest hit as European investors dumped insurance and banking stocks on fears of more losses.
Real (Frankfurt: BJU1.F - news) estate firm Liberty International, which is also listed in London, lost 8.06 percent to 57 rand.
At 1541 GMT the rand traded 2.54 percent weaker at 10.3390 against the dollar compared to Thursday's close at 10.0825. It touched 10.47/dollar earlier on Friday, its weakest level since Dec. 16 last year, Reuters data shows.
RISK AVERSION
'Basically what we are seeing is continued risk aversion in these markets, and you've had most of the big currencies falling. More investors are going for the 'safer' currencies, basically the Japanese yen and the U.S. dollar,' said Tapiwa Karoro, a dealer at Global Trader.
'As long as we continue to see poor (corporate) earnings -- General Electric (NYSE: GE - news) came out with earnings today not too good, Microsoft (NASDAQ: MSFT - news) yesterday had earnings even worse -- this is just fuelling concern about the global recession.'
'What you start to see is a lot of players pulling out of emerging markets as they view them as risky assets. Obviously currencies like the rand are the first to take that hit,' Karoro added.
Unlike the rand, government bonds had a more placid session on Friday.
The yield on the benchmark 2015 bond was last flat at 7.56 percent, while that for the 2036 note added 6 basis points to 7.70 percent.
On the local bourse, the JSE banking index lost 3.24 percent. Absa bank lost 5.65 percent to 91.50 rand, taking a cue from its parent company Barclays (LSE: BARC.L - news) , which was down 14.7 percent.
African Bank Investments fell 4.92 percent to 24.95 rand, FirstRand lost 4.69 percent to 13.01 rand and investment bank and asset manager Investec (LSE: INVP.L - news) dropped 6.51 percent to 34.33 rand.
Ferdi Heyneke, a porfolio manager at Afrifocus Securities, said depressed share price levels might attract some buying interest next week.
'There is still a lot of speculative money in the market and that's why you see all this volatility,' Heyneke said.
(Reporting by Gugulakhe Lourie, Zimkhitha Sulelo and Stella Mapenzauswa; editing by Stephen Nisbet) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/) Keywords: MARKETS SAFRICA/CLOSE
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