Financial Markets Stay Positive Despite Global Uncertainty

South Africa’s financial markets are showing resilience, defying international turbulence to keep investor sentiment upbeat. While global headlines around tariffs, inflation, and geopolitics make for an uneasy backdrop, local indicators suggest that confidence is holding steady, if not climbing.

JSE pushes past records

The JSE All Share Index has now notched up a third week at record levels, closing last Friday at 100 950 points. That’s a 1.2% gain for the week and a staggering 21.3% higher than at the start of the year. For local investors, the message is clear: appetite for South African equities remains strong.

Financial stocks were the star performers, with the Fin15 index climbing 3.5% in a single week. Analysts point to the stronger rand and lower interest rates as key drivers, giving banks and financial institutions room to breathe. For many, this index is a barometer of how confident South Africans feel about the economy. Right now, it’s ticking upwards.

Business confidence edges higher

The South African Chamber of Commerce and Industry (SACCI) business confidence index added another 0.8% in May 2025, reaching 115.8. While still below February’s record of 125.8, it is almost 8% higher than the same month last year.

Improved financial conditions, from stable inflation and precious metals prices to a friendlier rand exchange rate, have helped buoy the mood. Lower repo rates are expected to give the index an extra lift in coming months. Exports have also held surprisingly firm, even with the looming impact of US tariff hikes.

Global jitters, local calm

Globally, the mood has been unpredictable. After the Trump administration imposed new US tariffs, markets wobbled, only to recover last week. European indices like Germany’s DAX and France’s CAC 40 both gained 0.8%. In the US, lower-than-expected inflation data spurred optimism that the Federal Reserve might cut rates in September. The Dow Jones rose by 1.75% and the Nasdaq by 0.9%, signalling a recovery in sentiment.

For South Africans, this rebound is reassuring. Local traders often look to global markets for cues, and the turnaround offers a reminder that volatility is not the same as decline.

What’s next for investors?

This week’s focus will be on fresh inflation numbers from Statistics South Africa. July’s CPI is expected to come in at 3.2%, slightly above June’s 2.9%. If so, it would be the first time since March that inflation has breached the Reserve Bank’s proposed 3% target.

Globally, the release of the US Federal Reserve’s July meeting minutes will be closely watched, alongside housing data in the States and inflation figures out of the UK. Together, these reports could shape investor confidence and currency flows in the weeks ahead.

Why it matters

For South Africans, the resilience of the JSE is more than just a headline number. It affects pension funds, household wealth, and even the government’s fiscal outlook. Business confidence, while not at record highs, is showing signs of stabilising after a rollercoaster year.

The takeaway? Markets may be uncertain, but they’re far from gloomy. If anything, they’re showing an ability to shrug off global shocks while waiting for clearer signals on inflation and interest rates.

Also read: Traffic Fine Scam Warning: How Fraudsters Are Targeting South African Drivers

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Source: IOL

Featured Image: Vecteezy