The JSE All Share Index (Alsi) had shed 0.61 percent on the back of a 1 percent loss in the gold sector on Friday noon.
The drastic downgrade of the local gold producer, Gold Fields, on Thursday prompted investors to dispose of gold shares even on Friday morning.
The largest producer of gold in South Africa was downgraded by international ratings agency Standard & Poor’s (S&P).
“We believe that South African gold miner Gold Fields faces increased country risk in light of increasing social and political tensions,” the rating agency said in a statement.
Gold Fields was downgraded to BB+/B with a stable outlook, from BBB-/A-3 for its long- and short-term credit.
“We have revised downward our assessment of Gold Fields’ business risk profile to ‘fair’ from ‘satisfactory’ to reflect the increase in country risk in South Africa, and the company’s higher unit cash costs than peers,” it said.
The stable outlook reflected S&P’s opinion that Gold Fields’ financial risk profile would continue to be robust, benefiting from healthy gold prices, modest leverage, strong liquidity, and its conservative financial policy.
Meanwhile, the rand-dollar exchange rate was little changed at 8.89 rand ($1) as risk aversion continued to leave the local currency weak.
Platinum prices sagged 1.18 percent to $1,150 an ounce after the strike at Anglo Platinum ended and miners returned to work this morning.
On Wednesday, the company warned investors of lower earnings due to the labour unrest.
The worse-than-expected earnings estimates from Wal-Mart, the world biggest retail company and forthcoming budget debates in the US steered the Dow Jones down to its lowest level since June.
This sent the index tumbling down 0.23 percent by its close yesterday. The Nasdaq shed 0.35 percent. And the S&P500 slipped by 0.16 percent to reach its lowest point since July.