Rand hits 18-month low, stocks recover from plunge

The rand slumped to its weakest in 18 months on Monday, while local stocks plunged before staging a recovery as US President Donald Trump's sweeping tariffs and global recession fears rocked financial markets.

At 8.25am the rand traded at 19.31 against the dollar, down 1% from Friday's close, after earlier touching its weakest since October 2023.

Trump showed no sign of backing away from his tariff plans on Sunday, and investors worldwide poured into safe-haven currencies like the yen and Swiss franc on Monday. An emerging market stock index was heading for its biggest one-day sell-off since the 2008 global financial crisis.

Local politics also weighed on the risk-sensitive rand, which lost more than 3% against the dollar last week.

The ANC and DA have clashed over the national budget and investors are worried the DA could quit or be forced out of the government of national unity.

“Any removal of the DA from the [GNU] would have a significantly negative effect on South Africa's outlook. It is the partnership between the ANC and DA that created a sense of stability and progress,” said Casey Sprake, economist at Anchor Capital.

On the JSE, the Top-40 index slumped 5% in early trade to strike a nine-and-a-half-month low, before paring losses to trade down 0.3%.

Beer maker Anheuser-Busch was down 4.2%, Cartier owner Richemont down 3.2%, Anglo American down 1.6% and technology investor Naspers down 3.5%, among the decliners.

“The market is concerned that tariffs may cause an economic contraction and that they may be disruptive to the global supply chain,” said Roy Topol, portfolio manager at Cratos Asset Management.

Naspers' fall was partly linked to weaknesses in China, where its European subsidiary Prosus holds a 24.1% stake in Tencent, analysts said.

The benchmark 2030 government bond rose slightly, as the yield fell two basis points to 9.39%.