By Daniel Wesonga
South African equities continue to show positive momentum, with the JSE FTSE Top 40 Index breaking above 81,000 points, advancing 0.66% and closing 535.15 points higher. The market breadth remains strong, with 14 out of 20 sectors closing in the green. Financial stocks recorded gains, with Firstrand Ltd (+0.47%), Capitec Bank (+1.89%), Investec Ltd (+0.63%), and ABSA Group Ltd (+1.72%) showing robust performance. However, consumer durables and transportation sectors struggled, as KAP Ltd fell by 5.42%. Overall, the sentiment remains optimistic, supported by broad sector strength and stable economic indicators.

The decline in inflation expectations further supported market sentiment. South Africa’s one-year-ahead inflation expectations dropped to 4.3% for Q1 2025, the lowest since Q1 2021, from 4.5% in the previous period. This decline suggests less pressure on monetary policy, benefiting consumer spending and corporate profitability.

Meanwhile, President Ramaphosa’s reassurances that South Africa’s relationship with the U.S. remains intact helped stabilize investor confidence. While tensions over trade and political matters persist, the continuation of diplomatic engagement could mitigate risks to trade and foreign investment.

Wesonga is Senior Sales Manager at Pepperstone