Foreigners Exit R12.2B as JSE Top 40 Faces Breakdown Warning

The JSE Top 40 Index saw intense selling pressure this week as foreign investors sold a net R12.22 billion ($685 million)...

Written by: Arslan Butt • Wednesday, June 18, 2025 • 2 min read

• Last updated: Wednesday, June 18, 2025

Quick overview

The JSE Top 40 Index experienced significant selling pressure with foreign investors withdrawing R12.22 billion ($685 million) in local shares.
Geopolitical tensions and disappointing economic data from China are contributing to a cautious sentiment in South African markets.
Upcoming consumer inflation and retail sales data are expected to influence the South African Reserve Bank's interest rate decisions.
Infrastructure investments in the rail sector may improve export supply chains and positively impact JSE-listed stocks.

The JSE Top 40 Index saw intense selling pressure this week as foreign investors sold a net R12.22 billion ($685 million) of local shares. That’s a big outflow and it took the JSE FTSE All Share Index down 0.70% to 94,657.07. The outflow is reflected in the recent weekly trading data and shows a growing reluctance to stay exposed to South African equities in a world of global instability and fragile sentiment.

The sell-off hit multiple sectors but global risk-off sentiment is still weighing on South African markets. Geopolitical concerns in the Middle East and slower than expected China data have added to the caution. Locally investors are also waiting for key macro data releases that will influence the SARB’s July decision.

CPI and Rail Reform Could Change Market Tone

South African consumer inflation and retail sales data out this week will give more clarity on inflation dynamics. Economists are looking for something strong enough to influence the SARB’s interest rate path.

Meanwhile long term sentiment was lifted slightly by infrastructure optimism. The Department of Transport announced they received 162 private sector proposals to fix South Africa’s aging rail network. Improved rail infrastructure will ease export bottlenecks for mining and retail and eventually boost earnings and lift JSE listed stocks.

Foreign equity outflows R12.22B last week
CPI and retail data will guide central bank direction
Rail investments will boost export supply chains

Technical Breakdown in JSE Top 40 Index

The JSE Top 40 Index has broken a key ascending channel on the 4 hour chart and has broken below the 50-EMA at 87,495. A bearish “three black crows” candlestick pattern – three consecutive sessions – confirmed the momentum reversal. The index is now at 86,800 testing former support at 87,166 as new resistance.

JSE Price Chart - Source: Tradingview — JSE Price Chart – Source: Tradingview

The MACD histogram is very negative and the signal lines are diverging, so the bias is down. Until the bulls get back above 87,500 with volume, rallies will invite selling.

Trade Setup:

Short trigger: Below 86,270
Targets: 85,671 and 84,960
Stop-loss: Above 87,500

Technical Highlights:

Bearish engulfing at 87,495
Confirmed break of rising channel* MACD is weak

Foreign capital is exiting and domestic triggers are pending, so SA equities will be choppy for now. JSE Top 40 is bearish until we see structural support.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.