South African equities are vulnerable to ending the week with further volatility continuing Thursday’s trend, with the JSE FTSE Top 40 index slipping 0.33% to close at 85,595.72.
The decline follows a strong rally earlier in the month, as investors shifted to profit-taking amid mounting fiscal concerns and increased political noise.
Market breadth turned negative, with 13 of 20 sectors finishing lower. Electronic technology led the retreat, down 6.60%, while process industries and consumer durables declined 2.59% and 1.99%, respectively.
Pockets of resilience were evident in industrial services, which rose 1.77%, alongside modest strength in energy minerals and transportation.
Large-cap financials underperformed, with Firstrand down 0.63%, while Capitec Bank Holdings and Standard Bank Group each declined 0.90%. Naspers slipped 0.03%, reflecting investor caution toward heavyweight stocks. However, Investec gained 3.76%, supported by a strong dividend announcement, while Anglo American Platinum rallied 5.35%, supported by improved commodity sentiment.
The cautious tone was reinforced by the release of Budget 3.0, which laid bare fiscal fragilities including a wider consolidated deficit of 4.8% of GDP and a debt-to-GDP ratio projected to peak at 77.4% in 2025/26. Efforts to close a ZAR 75 billion gap were met with scepticism, as new revenue measures such as a modest fuel levy increase and strengthened South African Revenue Service’s (SARS) enforcement appeared insufficient. Growth forecasts were lowered to 1.4%, while expenditure cuts totalling ZAR 69.4 billion, which could impact the economy. Although President Ramaphosa’s Washington visit offered diplomatic reprieve, equity market direction remains tethered to domestic policy clarity.
