South African stocks fell to a three-week low on Thursday, extending falls in line with global share prices as investors remain on edge over the United States Federal Reserve’s next move on bond buying.
Reuters reports that retailers such as Woolworths haemorrhaged value after a sterling first quarter by the whole sector. The high-end clothing and food seller lost 4.5 per cent to 67.11 rand.
Retail sales have been slowing down as banks tighten unsecured loans to overextended South Africans. The uncollateralised loans have helped prop Africa’s biggest economy, which is struggling to keep growing as its key European export market shrinks.
Johannesburg’s general retailers index is at levels last seen in October. It is down more than 15 percent so far this year, after adding 45 per cent in 2012.
The Top-40 index shaved 1.2 per cent to 35,869.25, its lowest in three weeks. The All-share index ended down 1.1 per cent to 40,341.24.
All eyes now turn to Friday’s US non-farm payrolls report, which could determine when the Federal Reserve begins tapering its bond-buying.
Strong numbers will be a sign of economic recovery and could add to speculation the Fed may begin reducing its stimulus before the end of the year, putting pressure on riskier assets.
“I don’t expect the numbers to be great, they’ll probably be in line or marginally worse,” said Brandon Sacks, a sales trader at equity research firm and trading house Avior.