South African equities are likely to continue consolidating near recent highs, with the JSE FTSE Top 40 Index hovering at 82,614 points, just below the key resistance level of 83,000.
Despite a marginal decline of 0.13% on Wednesday, market sentiment remains constructive, led by broad sectoral strength. 14 of the 20 tracked sectors closed in positive territory.
Electronic Technology led with an 8.54% gain, followed by Technology Services and Distribution Services, which rose 4.57% and 3.96%, respectively.
In contrast, the Health Technology sector declined 27.38%, weighed down by a 30.7% drop in Aspen Pharmacare Holdings after it disclosed a contractual dispute over its mRNA manufacturing deal, potentially reducing FY25 EBITDA by up to ZAR 2 billion and triggering a possible impairment of ZAR 770 million.
Macroeconomic conditions have added a supportive undertone. South Africa’s annual inflation rate eased to 2.7% in March, its lowest since June 2020, down from 3.2% in February. Fuel prices declined 8.8%, and education fees increased by only 4.5%, contributing to the slowdown. Core inflation dropped to 3.1%, the lowest since September 2021. While interest rates remain high, the current disinflationary trend may create space for further policy easing in the second half of 2025, potentially supporting stocks.
