South African equities declined on Friday, with the JSE FTSE All Share Index falling below 100,000 points. The market breadth was negative, with most sectors underperforming due to fading momentum. Trade tensions with the US add pressure, particularly on the automotive sector, which faces risks from tariffs affecting export viability, potentially leading to decreased production and local investments. Additionally, headline inflation rose to 3.0%, remaining below the Reserve Bank's target, prompting speculation of interest rate cuts to support the economy and risk appetite.
South African equities experienced a notable decline on Friday, with the JSE FTSE All Share Index falling below the critical 100,000-point mark due to fading market momentum.
The negative market breadth indicates that only a few sectors managed to remain in positive territory while pressures from US trade tensions weigh heavily on the market.
The automotive sector, essential to South Africa's manufacturing, faces direct threats from US tariffs, potentially leading to reduced production, postponed investments, and a shift of capacity overseas.
With headline inflation rising to 3.0% but still below the Reserve Bank's target, market participants are anticipating potential interest rate cuts, possibly amounting to 75 basis points by year-end.
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