JSE Index Eyes 91,800 After Rebound, Despite US Tariff Threats on SA Exports
The JSE All Share Index (JALSH) rose 0.91% on Friday to close at 98,633.41 ZAR, up 889 points. This was largely due to a weaker...
Quick overview
- The JSE All Share Index rose 0.91% to close at 98,633.41 ZAR, driven by a weaker US jobs report that fueled speculation of potential interest rate cuts.
- The rand strengthened, benefiting local retailers and manufacturers, although trade-sensitive sectors faced pressure due to potential US tariffs.
- President Ramaphosa emphasized government efforts to maintain US market access and support vulnerable industries amid geopolitical risks.
- The JSE Top 40 Index shows bullish momentum, with key resistance at 91,400 and targets set at 91,794 and 92,774.
The JSE All Share Index (JALSH) rose 0.91% on Friday to close at 98,633.41 ZAR, up 889 points. This was largely due to a weaker than expected US jobs report which has renewed speculation that the Fed may cut interest rates as early as September. Lower US rates are good for emerging markets and so investors are turning back to SA equities and currency.
The rand strengthened with this market sentiment and is a tailwind for the JSE. A stronger rand reduces import costs for local retailers and manufacturers who import goods. But the rally was uneven with export oriented and trade sensitive sectors under pressure.
US Tariffs Threaten Trade Exposed Sectors
Despite the currency gains the broader optimism was tempered by geopolitical risks. SA goods may face a 30% import duty in the US – the highest in Sub Saharan Africa. The news spooked exporters and investors and local stocks fell in trade exposed sectors.
President Cyril Ramaphosa addressed this directly and reiterated government efforts to negotiate continued access to the US market. The government will roll out targeted support measures for vulnerable industries.
Key takeaways:
- SA goods face 30% US import duty
- Trade exposed stocks lagged the market
- Government to preserve US market access
Finance Minister Enoch Godongwana also hinted at domestic stimulus to support key sectors. But analysts warn that any relief will take time to materialise and may not fully offset export disruptions.
JSE Top 40 Technical Analysis: Index Targets 91,794
Technically the JSE Top 40 Index looks more positive. The index bounced sharply from 88,660 – just above the rising trendline from early July – and formed a bullish engulfing candle at the 78.6% Fibonacci retracement.
This reversal has reestablished short term bullish momentum.Now at 91,200 the index has reclaimed the 50% and 38.2% retracement levels. RSI is 54.7 so there is still upside without being overbought. The 50-period simple moving average at 91,400 is the key resistance. If bulls break this level then 91,794 (23.6% Fib) and 92,774 are the targets.
Trade setup:
- Entry: Close above 91,400
- Targets: 91,794 and 92,774
- Stop-loss: Below 90,710 for downside protection
If the SMA holds then 90,226 or 89,525 may be retested. For traders this is a wait-for-confirmation scenario – momentum is back but risk is still tied to global trade.
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