THE rand was pounded yesterday along with other emerging currencies for a second day in a row on growth concerns that have mounted to become fears of a global recession.
The JSE followed European stocks lower as mining stocks came under pressure after a decline in commodity prices.
The probability of a recession globally - and hence locally - remained high, Annabel Bishop, group economist at Investec, said in a note yesterday.
"The eurozone has pulled back once again from making the decisions on unity critical for its survival, while the US has yet to cancel the fiscal cliff and there is no certainty that China will avoid a hard landing," she said.
Austerity measures to counter sovereign debt problems in Europe have weakened growth prospects in the region, which has subsequently spread to export-orientated economies.
The world's second-biggest economy, China, releases its second-quarter gross domestic product data today, with analysts expecting the lowest growth levels since 2009.
The rand fell for a second day against the dollar to its lowest level since the end of last month, dropping 1,3% to R8,35/$ in late afternoon trade.
Markets were disappointed that there were no new signals of another round of quantitative easing by the US Federal Reserve to boost its economy and in turn the global economy, Michael Keenan, Absa Capital's currency strategist, said yesterday. "That's what caused risk appetite to come under pressure."
Gold fell as much as 1,3% to $1555,35/oz and in the late afternoon was trading at levels seen at the end of last month.
Platinum, which combined with gold makes up a significant portion of SA's exports, fell as much as 1,6% to $1404,60/oz. The white metal is only 1,1% firmer for the year.
Minutes from the Federal Reserve released earlier this week signalled that a further economic slowdown would bring growing support among policy makers for additional steps to spur the three-year expansion.
In the third quarter, asset managers expected the US economy to stabilise and China "finding the bottom", Mr Keenan said. "In the short term, there'll be disappointing data."
Along with European stock markets, the JSE all share index fell for a second day, ending the day 0,9% lower at its lowest level since the end of June.
Local stock markets were dragged lower by heavyweight miners, BHP Billiton and Anglo American, as commodity prices weakened.
Global stocks slid for a seventh day, the longest streak since November, amid concern that a faltering economic recovery will hurt corporate profits. The yen and dollar surged and government bond yields from Germany to South Korea fell to records.
Germany's two-year note yield fell to a record -0,042%, with 10-year US Treasury yields within five basis points of the lowest yet. The yen strengthened against all 16 of its peers, while the dollar rose against all but the yen.
Oil slipped 0,7% to $85,18 a barrel, paring a loss of 1,9%.
Bank of America strategists reduced earnings estimates for S&P 500 companies for this year and next, citing Europe's debt crisis and slowing growth in China. Investors are bracing for what is projected to be the first decline in US corporate profits in nearly three years, while China's economic growth is forecast to fall below 8% for the first time since 2009.
The S&P 500 has retreated more than 3% over the past six days. Stocks fell yesterday even after applications for US jobless benefits last week fell by 26000 to 350000, the fewest since March 2008, US labour department figures showed. The Stoxx Europe 600 index fell 1, 1% for its biggest drop of the month.
The MSCI emerging markets index sank 2%, its biggest intra-day decline of the month.
Chinese stocks in Hong Kong slid 2,2% and benchmark indices fell more than 1% in India, Hungary, the Czech Republic, Taiwan and Thailand.