JSE Price Slips 0.12%—Banks Drag, Top 40 & Gold Stocks Shine
The JSE FTSE All Share Index slipped 0.12% on Tuesday, down 109.64 points to 91,201.51 ZAR, as global macro uncertainty spooked investors.
Quick overview
- The JSE FTSE All Share Index fell 0.12% amid global macro uncertainty and concerns about a recession.
- South African financial stocks suffered significant losses, particularly Standard Bank, which dropped 8.48%.
- In contrast, gold mining stocks performed well as investors sought safe-haven assets amidst financial instability.
- The JSE Top 40 Index showed bullish signs, breaking out of a long-standing range, suggesting potential for recovery if economic conditions stabilize.
The JSE FTSE All Share Index slipped 0.12% on Tuesday, down 109.64 points to 91,201.51 ZAR, as global macro uncertainty spooked investors. Concerns about a global recession and renewed US-China trade tensions saw emerging markets go risk-off.
With foreign capital pulling back, SA equities followed global jitters, especially in the financial sector.
Financials Extend Losses
SA’s financials took the biggest hit, with major banks tumbling as global liquidity and trade-linked outflows worried investors.
Standard Bank led the decline, down 8.48% to R205.93, while Old Mutual and Nedbank also fell sharply. Over the past month, the financials have lost 8.05% – a clear indication of their sensitivity to international volatility.
Institutions with cross-border exposure are vulnerable as investors move away from risk assets and emerging market financials.
Gold Stocks Shine as Investors Flee to Safe-Haven
In contrast, gold mining stocks were a bright spot. Gold rose above 3,250 per ounce and investors rotated into safe-haven assets.
AngloGold Ashanti, Harmony Gold and Gold Fields outperformed as investors sought hedges against financial uncertainty and inflation.
This is gold’s traditional role as a store of value during times of geopolitical and economic instability.
Technical Analysis: JSE Top 40 Bullish
While the All Share Index struggled, the JSE Top 40 Index has broken out of the long-standing range of R84,000-R84,300 and is now above the trendline and 50 EMA (R83,224). The MACD has also given a bullish crossover.
Entry Point: Retest near R84,300
Targets: R84,900 and R85,900
Stop-Loss: Below R83,200
This is a buy-the-dip opportunity for trend followers if price holds above the breakout level. A sustained move could take the index to R85,897.
Conclusion: Sector Paths Diverge on JSE
The JSE is caught between two opposing forces. Financials are being hit by global headwinds and recession fears while mining stocks and the Top 40 Index offer a bullish counterweight.
The recent Top 40 breakout suggests investors may return if the economic signals stabilise. But macro risks are still in control and volatility is high and investors are cautious.
Watch this space to see if the Top 40 breakout holds—or fails.
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