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South African equities opened on a subdued footing Thursday, with the JSE FTSE All Share Index hovering near the 100,000 level but lacking clear direction.
While the benchmark remains within reach of recent highs, market breadth was narrow, with 12 out of 20 sectors registering losses.
Electronic technology and non-energy minerals led the laggards, while health technology and Communications offered modest support.
The overall tone was one of hesitation, as investors weighed the implications of upcoming monetary policy decisions while continuing to digest newly released inflation data, which, though slightly firmer, remains within the South African Reserve Bank’s (SARB) target range.
June’s headline CPI rose to 3.0% from 2.8% in May, returning to the SARB’s 3-6% target range for the first time in three months. Core inflation eased to 2.9%, the lowest since April 2021. With domestic demand still weak, markets are increasingly pricing in a 25-basis point cut at next week’s Monetary Policy Committee meeting. Such a move would lend support to interest-rate sensitive sectors and could help stabilise equity valuations in the near term.
Meanwhile, the US House Foreign Affairs Committee’s approval of the US-South Africa Bilateral Relations Review Act has raised concerns over trade reprisals and diplomatic fallout. Potential exclusion from the African Growth and Opportunity Act (AGOA), alongside the threat of punitive tariffs and targeted sanctions, poses a significant risk to agricultural exporters and broader investor sentiment.
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