Global equities advanced as investors rotated back into AI leaders with the S&P 500 and Nasdaq closing at new all-time highs. The US-rally was underpinned by a strong earnings season across technology and financials. Emerging markets also performed well, benefiting from their exposure to the global AI supply chain. However, tensions between the US and Iran continued to dominate headlines, as the ongoing disruption to the Strait of Hormuz and impact of elevated oil prices amplified inflation concerns. Recent central bank meetings across developed markets resulted in policy rates being left unchanged, as countries signalled a cautious, data-dependent stance amid conflicting growth and inflation dynamics.
Closer to home, South African equities experienced a welcome reprieve and ended the month in positive territory, supported by Financials, Industrials and Small-caps. Headline inflation remained at the lower end of the SARB’s target range, reaffirming its focus on the 3% midpoint. Market expectations shifted, with consensus now pricing in two policy rate hikes over the course of the year.
- The JSE All Share moved into positive territory, up 1.6%.
- Financials (up 4.2%) and Industrials (up 3.2%) enjoyed solid gains, while Resources (down 2.3%) lagged, pressured by softer commodity prices and declines across several key mining counters.
- Small-caps rallied (up 3.5%), while Mid-caps recorded modest gains (up 0.9%). Large caps rose (up 1.6%), broadly in line with the JSE All Share Index.
- South African listed property rebounded meaningfully, with both ALPI and S&P SA REIT Index delivering 5.4%.
- SA Nominal Bonds posted a strong month (up 3.3%), as yields declined. Inflation-Linked Bonds (up 4.4%) outperformed nominal bonds.
- Emerging market equities were the standout performers globally, with the MSCI Emerging Market Index returning 14.7%, while developed markets lagged, as the MSCI World returned gains of 9.6%.
- The rand strengthened against most major currencies. The rand gained against the US dollar (Rand appreciated 2.4%), and against the Euro (Rand appreciated 0.7%), however weakened slightly against the Pound (Rand depreciated 0.5%).
- Resources ended a volatile month mixed, as Gold prices were broadly flat (down 0.7%), while Platinum gained (up 1.5%), and Brent Crude ended lower (down 3.7%) despite having reached highs above $110 intra-month.
Source: Factset
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