South Africa's financial services led the JSE lower on Wednesday as the local bourse tracked large declines in stock markets all over the world, with investors fearing a global recession arising from the brewing US and China trade war.

The global meltdown on stock exchanges due to the imposition of import tariffs by US President Donald Trump on the US's trade partners and counter duties by China saw the JSE All Share Index lower by 2.07% to 82 486 points just after 5pm, and 8.05% down over the last four weeks.

Similarly the London Stock Exchange's FTSE 100 Index had fallen 3.25%, the Euro Stoxx 50 Index of leading blue-chip companies in Europe had fallen 3.48%, while the Nikkei had ended 3.9% lower in Japan.

On the JSE, the declines were led by the biggest financial services groups in the country, with the share price of Standard Bank, Africa’s biggest bank by assets, falling a whopping 8.48% to R205.93 in the afternoon, while Old Mutual’s share price was down 8.8% to R9.46. Nedbank’s share price fell 7.7% to R226.48, and Absa Group’s share price fell 4.85% to R158.57.

Contributing to the declines were Standard Bank, Old Mutual, and Nedbank’s share prices that went ex-dividend on Wednesday, which means the share prices fall by the value of the dividend that is paid out on that date.

Nitrogen Fund Managers chief investment officer, Rowan Williams, said the lower stock prices were also a “knee-jerk risk-off reaction” to China’s higher reciprocal tariffs, mainly by foreign investors wishing to reduce their exposure to global emerging markets.

South Africa’s big listed financial services groups were among the most liquid on the JSE, so they could be sold and bought easily, while banks were also increasingly exposed to tighter bond yields globally and contracting macroeconomic conditions, he said.

African countries would be more exposed to these headwinds, hence the large decline in Standard Bank’s share price given its large African footprint, he said.

Byron Lotter from the VestAct asset management firm said it was uncertainty driving local share prices lower, and the largest financial services groups, with their broad exposure over the entire South African market, would likely be more exposed to any potential economic slowdown in the country than other companies, while the continued rand devaluation would have also impacted their share prices.

In sharp contrast, and in line with even more gains in the gold price, AngloGold’s share price increased 6.1% on the JSE in the afternoon, Harmony Gold Mining was up 6.27%, and Goldfields’ share price gained 3.53%.

The miner share prices increased after the spot price of gold increased 1.89% by midday to $3 061.90 per ounce, bringing the price of the yellow metal 28.1% higher over a year.

Sasol’s share price, which has traditionally moved in tandem with oil prices, mirrored even lower international oil prices, with the Brent crude oil price plummeting 6.16% to $58.88 per barrel. Sasol’s share price fell 7.3% to R54.01, as investors also fretted about ongoing operational challenges within the fuel and chemicals-from-coal group.

Oil prices fell to even deeper four-year lows on Wednesday after China announced additional tariff measures on US goods, in retaliation against President Donald Trump’s tariff policy. China will impose 84% tariffs on US goods from Thursday, up from the previously announced 34%.

BUSINESS REPORT