S.Africa stocks slide, gold shares hammered in global sell-off

JOHANNESBURG (Reuters) - South African stocks suffered their biggest daily drop in almost six months on Thursday, led by gold firms like AngloGold Ashanti as global equities fell on speculation the U.S. Federal Reserve may start trimming stimulus next week. This week's U.S. budget pact eased some of the fiscal drag on its economy and improved the chances the Fed will scale back its bond-buying operations at the December 17-18 meeting. The stimulus programme has helped equities hit multi-year highs, including in South Africa, shrugging off sluggish economic growth, labour unrest and other domestic clouds over investor sentiment. Shares of South African bullion producers were hammered as the prospect of Fed tapering increased global risk aversion. "It's a risk-aversion or risk-off trade now and so all of the cyclical stocks like gold are getting whacked," says Abri du Plessis, chief investment officer at Gryphon Asset Management. Johannesburg's Gold Mining Index, which has lost over half its value this year, shed 6.50 percent to 1,028.00 as spot gold fell over 2 percent. AngloGold, Africa's top producer, was the biggest decliner on the Top-40, tumbling over 7 percent to 122.50 rand, though charts suggest it is moving into oversold territory. Rival Gold Fields sank over 6 percent. The Top-40 index ended the session 2.92 percent lower at 38,575.26, while the wider All-share index fell 2.67 percent. For both indices it was biggest daily percentage decline since June 20. Decliners outnumbered advancers 225 to 73 with 41 issues unchanged, according to preliminary bourse data. Trade was fairly brisk with almost 220 million shares changing hands.