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South African equities opened lower on Friday, with the JSE FTSE All Share Index moving below the 100,000-point mark.
The decline comes after the market’s momentum faded. Market breadth was firmly negative, with only a few sectors in the positive territory.
At the same time, the market could remain under pressure from trade tensions with the US.
The automotive sector, a critical pillar of South Africa’s manufacturing base, stands at the forefront of this pressure. The US tariffs directly threaten the export viability of key auto models produced domestically for global markets. Original equipment manufacturers may respond by scaling back production, postponing local investment, or shifting capacity to other regions. For South African equities, this presents material downside risk across industrial and logistics tied to the vehicle value chain.
Attention is now turning to monetary policy. Headline inflation ticked up to 3.0% in June but remains below the South African Reserve Bank’s midpoint target of 4.5%. With inflation expectations anchored and growth sluggish, market participants could anticipate a series of interest rate cuts, potentially totalling 75 basis points by year-end. The latter could suppor the economy and risk appetite.
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