Today’s market analysis on behalf of Daniel Wesonga, Senior Sales Manager at Pepperstone
10th February 2025
South African stocks remain resilient, though some short-term volatility may arise as the JSE FTSE Top 40 index revisits recent highs above 79,000 points, potentially triggering profit-taking activities. This could dampen bullish momentum after a strong rally, introducing some uncertainty. Despite this, the performance of key sectors such as energy minerals, technology, and financials continue to provide support, suggesting that while near-term fluctuations are possible, the overall market outlook remains cautiously optimistic. The financial sector, in particular, remains a strong contributor, reinforcing market confidence. On Friday, the Top 40 benchmark closed 0.47% higher.
President Cyril Ramaphosa’s State of the Nation Address has been well-received by both the Banking Association of South Africa and Business Unity South Africa, with a focus on economic growth, industrial policy, and private sector involvement. While this could indicate optimism, markets may adopt a wait-and-see approach. However, digital infrastructure and housing improvements could contribute to medium to long-term investor confidence.
Meanwhile, weakness in the manufacturing sector, reflected by a 2.6% year-on-year decline in November, raises concerns about the country’s economic health. This could prompt cautious sentiment. Nonetheless, strength in non-manufacturing sectors such as technology and energy could mitigate the negative impact, providing support to the broader market. While the outlook is tempered by manufacturing challenges, recovery in other areas may provide a buffer against potential market downside risks.