JOHANNESBURG – South African stocks tumbled to a 4-1/2 month low on Tuesday as skittish investors dumped index heavyweights such as Lonmin, as part of a global equity sell-off on nagging concerns about the European debt crisis.
Retailers were also hit, with South Africa’s third-largest listed clothing retailer, Mr Price Group, dropping 5.4 percent to 96.48 rand after the $3 billion company booked full-year earnings largely in line with expectations.
The benchmark Top-40 index was down 1.9 percent at 28,971.82, its lowest since early January. The All-Share skidded 1.8 percent to 32,887.45.
“At the moment European concerns are putting pressure on the markets and people are putting money into the dollar, which is obviously putting pressure on commodities, which affects us,” said Travis Robson, equities and derivatives trader at Global Trader.
“We can expect a lot of volatility in the market. At the moment it is a difficult market to trade.”
The rand fell to a fresh 2012 low of 8.4626 against the dollar in afternoon trade, tracking the euro’s moves.
The Top-40 is now trading at a price-to-earning ratio of around 12, according to Thomson Reuters data, putting it at its cheapest level since October 2011. However, traders have said any broad buying will likely be delayed until there is a more certainty around the future of Europe.
Spot platinum prices led to a hammering of Johannesburg-listed shares of the metal. Lonmin was down over 5 percent to 97.95 rand.
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Lonmin is the Top-40’s worst performing stock over the last 12 months, down nearly 40 percent. Platinum has been hit by fears about the outlook for global demand. The precious metal is used to make autocatalysts that reduce car emissions.
Impala Platinum dropped 3.9 percent to 135.25 rand. The world’s second-largest miner of the metal could see profits hit by a stoppage at its flagship Rustenburg mine, where it is losing 3,000 ounces of production a day.
Over 204 million shares changed hands, according to the latest exchange data available at 1515 GMT, compared with 197 million in the previous session.
A total of 200 shares declined, while 59 advanced and 57 were unchanged.
