Daniel Wesonga

South African equities faced continued pressure on Wednesday, with the JSE FTSE Top 40 index declining 0.65%, falling below the 84,000-point threshold. Broad-based negative sentiment prevailed, as 15 out of 20 sectors closed in the red. The energy minerals sector led the declines, down 3.68%, followed by technology services, which fell 2.41%. Consumer durables and commercial services also saw notable losses, dropping 1.34% and 1.14%, respectively. Among major stocks, Naspers fell 2.29%, Gold Fields decreased 0.65%, and Capitec Bank lost 0.12%. Firstrand closed flat, while Standard Bank and Investec posted small gains of 0.22% and 0.23%, respectively.

The market’s bearish sentiment was driven by a downgrade of South Africa’s economic outlook. Moody’s and the Bureau for Economic Research have revised 2025 GDP growth down to 1.5%, reflecting global trade uncertainties and persistent domestic challenges such as infrastructure inefficiencies and governance issues. These factors are likely to weigh on investor confidence.

However, the South African Reserve Bank’s (SARB) potential to cut interest rates in the latter half of 2025 could provide some support. With inflation figures easing, the SARB may adopt a more accommodative stance, which could help stimulate domestic demand and offer relief to consumer-facing sectors. Despite these potential tailwinds, structural challenges and global uncertainties suggest a cautious near-term outlook for South African equities.

Wesonga is Senior Sales Manager at Pepperstone