JOHANNESBURG – The JSE all share index dropped to a low of 3.5% in intra-day trade yesterday as kit joined a global equities rout as fears of a US Federal Reserve rate hike and surging bond yields became more pronounced.
The global selloff, which wiped off $4 trillion (R 48.18 trillion) in the value of global equities, continued unabated after further sharp falls for stocks in Europe, Asia and the US.
Analyst and director at TreasuryOne, Alet Opperman, said the universal belief for the past couple of months was that stock markets had been overextended and that there was a correction imminent.
“Should the losses on Wall Street continue, the current emerging markets (EM) resistance will crumble, and we could see the rand and other EM currencies feeling the heat and start to weaken significantly as the markets will turn risk-averse,” said Opperman
The local unit was bid at R12.03 against the US dollar at 5pm from the R12.06 it was bid at 5om on Monday.