Today’s market analysis on behalf of Daniel Wesonga, Senior Sales Manager at Pepperstone
11th February 2025
South African equities remain bullish, with the JSE FTSE Top 40 Index closing up 0.36%, approaching the 80,000-point psychological level. However, the potential for a near-term correction looms, as profit-taking could weigh on market sentiment. Despite the overall positive momentum, 13 out of 20 sectors ended in the red, with producer manufacturing, process industries, and consumer durables losing 2.03%, 0.88%, and 0.82%, respectively. This sectoral divergence suggests a mixed outlook for the market, as weakness in cyclical sectors could dampen the broader rally.
On a more positive note, the electronic technology sector surged by 21.89%, while technology services and industrial services gained 0.82% and 0.79%, respectively. These sectors provided key support to the broader market, particularly technology, which remains a growth driver. Although the financial sector, including Firstrand Ltd, Capitec Bank Holdings, and Standard Bank Ltd, saw losses of 0.26%, 2.02%, and 0.80%, respectively, the strength in technology and industrial services continues to support the broad market.
Looking ahead, the focus is shifting to South Africa’s Manufacturing Production data for December, following a 2.6% year-on-year decline in November last year, the largest contraction since June. A drop in sectors such as motor vehicles and textiles contributed to this slowdown, indicating potential risks and headwinds for domestic equities. A further deterioration in industrial output could weigh on the market, but signs of recovery could provide much-needed support, particularly for cyclical sectors.