#RandReport: Stocks, rand start year lower on weak China data
The rand weakened 1.09 percent to 15.6285 to the greenback compared with its 31 December close.
JOHANNESBURG - South African stocks fell to a two-week low on Monday, the first trading day of 2016, weighed down by renewed concerns over Chinese economic growth and tensions in the Middle East.
The rand also lost more than one percent against the dollar.
All blue chip stocks listed on the Johannesburg Securities Exchange closed in the red and the benchmark Top-40 index dropped 2.92 percent to 44,459.75 points.
Life insurer Old Mutual was the biggest loser among the blue chips, shedding 6.68 percent to close on 38.68 rand.
"It is a continuation of what happened last year. There is massive risk aversion because China's stocks are down and there are tensions between Saudi Arabia and Iran," ETM Analytics analyst George Glynos said.
The broader All-Share index declined 2.72 percent to 49,316.61 points.
The Gold Mining index bucked the downward trend on Monday, rising 6.39 percent after bullion's spot price jumped more than 1 percent as the rising Middle East tensions bolstered its safe haven status.
On the foreign exchange market, the rand retreated against the dollar due to weak domestic fundamentals, a tendency that is expected to persist.
"After the turmoil we saw in December the currency will remain on the back foot in the coming weeks," NKC African Economics economist Bart Stemmet said.
The shock removal of South Africa's finance minister in early December triggered a heavy sell-off that pushed the currency to a historic low of 16.0485.
The rand weakened 1.09 percent to 15.6285 to the greenback compared with its 31 December close of 15.4600.
Illiquid conditions also weighed on the rand as market players were still waking up slowly to the New Year.
"Liquidity is still thin and markets were spooked by the Chinese sell-off," Stemmet said.
"China is among the biggest buyers of South African exports and any bad news out of China will affect the rand and local stocks negatively."
In fixed income, the yield for the benchmark 2026 government bond shed 4.5 basis points to 9.725 percent.