Daniel Wesonga

South African equities may see their momentum slow down following the recent rally, with the JSE FTSE Top 40 index closing flat on Tuesday at 86,131.92 points, indicating caution after a stretch of gains. While market breadth remained broadly positive, as 13 of 20 sectors ended in positive territory, performance was uneven.

Utilities led the gains with a 3.89% increase, followed by electronic technology (1.79%), distribution services (1.31%), and technology services (1.23%). In contrast, energy minerals declined sharply by 9.23%, while transportation dropped 1.79%. Additional weakness was recorded in producer manufacturing, health services, and non-energy minerals.

The moderation in market momentum coincides with mounting macroeconomic headwinds. Economic growth expectations have been revised lower amid concerns over the direct and indirect impact of U.S. tariffs. Although South Africa’s direct exposure could be relatively limited, the knock-on effects on global trade and the country’s key export partners may dampen external demand.

Meanwhile, the South African Reserve Bank is widely expected to lower its benchmark interest rate by 25 basis points this week, which could provide near-term support to the stock market. Medium-term support may emerge from infrastructure-led investment. President Cyril Ramaphosa has announced ZAR 238 billion in project commitments, while the National Treasury has allocated ZAR 1.03 trillion over the next three years. These measures could lift activity in construction and utilities.

Wesonga is Senior Sales Manager at Pepperstone