– May stabilise with Trump’s tariff policy shift
Lagos — The South African equity market remains vulnerable to heightened volatility. On Wednesday, the JSE FTSE Top 40 Index closed 2% lower at 75,690 points, reflecting widespread negative investor sentiment. Sectoral performance was weak, only 3 of 20 sectors ended in positive territory.
Producer manufacturing, distribution services, and non-energy minerals were the top performers. On the downside, utilities and electronic technology sectors underperformed. Among the index’s top constituents, Naspers ended the session 1.76% lower, while financial heavyweights Firstrand, Standard Bank Group, and Capitec Bank Holdings posted declines of 2.5%, 10.08%, and 2.25%, respectively.
Global trade tensions and domestic political instability continue to weigh on sentiment. Investor risk aversion has been amplified by U.S. President Trump’s sweeping tariff actions and ongoing uncertainty around South Africa’s coalition government.
Budget-related divisions within the Government of National Unity have led to fears of instability, notably if the pro-business Democratic Alliance were to exit, which has further impacted investor confidence.
However, President Trump’s abrupt reversal of his tariff stance offers a potential path to stabilisation. Trump announced a 90-day suspension of most new tariffs under his “reciprocal” trade framework, following appeals from over 75 countries.
While tariffs on Chinese goods were raised to 125%, the pause and reduction to a 10% rate for others offers South African exporters temporary relief, especially given the country’s AGOA-linked trade benefits.
Although uncertainty around U.S. policy direction remains, this shift could help ease global trade frictions. If South Africa’s coalition government remains intact and global trade conditions improve, there is room for the local equity market to stabilise after recent sharp losses.
