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Johannesburg - The JSE opened sharply lower on Wednesday after a stock selloff in China as investors resorted to panic selling of counters across the board.
READ: China stock rout sparks yen buying
Technology counters including Tencent (-7.95%), in which local internet giant Naspers [JSE:NPN] has a 34% stake, were hardest hit. Naspers, tracking the Tencent losses, was down 4.05% to R1 694.93.
Commodities were also among the biggest losers with Exxaro Resources [JSE:EXX] (-5.62%), Anglo American Platinum [JSE:AMS] (-2.87%), Gold Fields [JSE:GFI] (-2.32%) and Kumba Iron Ore [JSE:KIO] (-2.06%) the biggest drags on the Resources index, which was down 1.06% in mid-morning trade.
The All-share index was down 0.54%, while the Top-40 gave up 0.46%.
Barclays Group Africa [JSE:BGA] (+1.6%) surprised on the upside, following the axing of Barclays CEO Antony Jenkins.
Jenkins was fired after falling out with the board over the pace of cost cutting and the size of its investment bank, according to the BBC.
READ: UPDATE: Barclays fires group CEO Anthony Jenkins
Absa is a part of Barclays Africa, of which the British bank is the parent.
In a full statement on its website, Barclays announced the departure of Jenkins as chief executive and the appointment of John McFarlane as executive chairperson pending the appointment of a new CEO.
Brett Birkenstock of Overberg Asset Management said the market appeared to have liked McFarlane's ouster of Jenkins amid deeper price cuts after being at the helm for only three months. The share price rose 3%.
"Many analysts have had downgraded BGA form a HOLD to a SELL," he said.
Among the winners on the JSE were retailers Mr Price [JSE:MPC] (+1.14%) and Pick n Pay [JSE:PIK] (+1.07%), Netcare [JSE:NTC] (+1.21%) and SABMiller [JSE:SAB] (+1.10%).
Telkom [JSE:TKG], which is awaiting judgment in its job cuts dispute with labour union Solidarity, was up 0.16% at R57.86.
In currencies, the rand traded at a four-week low at R12.56/$, down 0.35% on the previous session's close, according to data from INET BFA.
READ: Rand hits 4-week low in risk averse trade
Gold was trading 0.19% down at $1 152.90 an ounce, while platinum and palladium took knocks of 2.29% to $1 012.50 and 2.09% to $633.50 respectively.
Birkenstock said the rand, being a very liquid emerging market currency, will drop when the risk-off market move is at play. "The USD is seen as 'safe-haven' and will rally against most other currencies - especially the risker currencies like the rand. There may be further ZAR weakness depending how much longer we have risk aversion in the world markets."
Meanwhile, Reuters reports that Chinese stocks dived on Wednesday, as the country's securities regulator warned investors were in the grip of "panic sentiment" and the market showed signs of freezing up as companies scrambled to escape the rout by having their shares suspended.
Beijing, which has struggled for more than a week to bend the market to its will, unveiled yet another battery of measures to arrest the selloff, and the People's Bank of China said it would step up support to brokerages enlisted to prop up shares, according to the report.
"I've never seen this kind of slump before. I don't think anyone has. Liquidity is totally depleted," Du Changchun, an analyst at Northeast Securities, told Reuters.
Around 30% has been knocked off the value of Chinese shares since mid-June, and for some global investors the fear that China's market turmoil will destabilise the real economy is now looming as a bigger risk than the eurozone crisis.
"It's a stampede. And the problem of the market is that all the players move in the same direction, and are too emotional," said Wang Feng, CEO and founder of hedge fund firm Alpha Squared Capital Co and a former Wall Street trader, according to Reuters.
Birkenstock told Fin24 the drop in the China markets might have been expected as the index was up over 40% year-to-date at one point. "The market was considered overvalued.
"The market slump is a combination or the lower commodities demand, also the states freezing of trade on parts of the market. This has been as expected and previously seen, ineffective. This has worsened the selloff with stock index down of 8% at some points.
"South Africa is an emerging market and commodity driven economy and hence lower demand in China will see further drops in the JSE - especially in resources and commodities. This trend has been at play for some time and looks set to continue."
There is good news in all this. "What is good? Shares are becoming more attractive again. The earnings yield is 5.9%. The dividend yield is over 3.1%. It is possibly time to start looking to enter the market. Greece is only 2% of the total eurozone GDP. Globally it is very small," Birkenstock said.
