BOURSE AND RAND TUMBLE

STOCKS plunged to a more than fouryear low yesterday, joining a global sell-off in riskier assets as oil prices collapsed more than 30 percent, hitting chemical and energy firm Sasol the hardest.

Saudi Arabia’s plans to hike crude production and slash its official selling price came after Russia on Friday balked at steep production cuts proposed by the Organisation of the Petroleum Exporting Countries (Opec) to stabilise prices hit by economic fallout from the coronavirus.

The decline in the JSE all share index and Top40 index was compounded by fears the impact from the fast-spreading coronavirus will intensify.

South Africa confirmed its first case of the virus on Thursday, and by yesterday officials had confirmed another four cases.

The all share index tumbled 6.23 percent to 48 819.55 points, while the Top40 index retreated 6.57 percent to 43 687.17 points, its weakest level since January 2017.

“The collapse in oil is being felt across all asset classes today (yesterday),” said FXTM chief market strategist Hussein Sayed in a note.

“Over the past three weeks, investors have been revisiting their portfolio’s asset allocation to adjust for the coronavirus impact. Now, they also need to take into consideration the free fall in oil prices which could accelerate recession risks.”

Chemical and energy firm Sasol was the biggest decliner, sitting at the bottom of both indices. Shares plunged 46.56 percent, a six-and-ahalf-year low, to close at R85.35.

Mining stocks also took a hit as silver, palladium, platinum and gold prices fell. The mining index slumped 10.58 percent to 35 594.4 points.

In the currency market, the rand slumped to R17 to the dollar, its lowest since February 2016, earlier in the session.

By 5pm, the rand had recouped some losses to bid at R15.94 to the greenback.

The sell-off was exacerbated mainly by low liquidity in early trade and resumption of power cuts.