JSE recovers amid global risk-off sentiment

The local bourse recovered on Monday, rising 1.60%, with gold and mining stocks leading the gains amid global risk-off sentiment sparked by recent US tariff actions. The rand also strengthened to about R17.96 against the dollar, providing some relief to importers. However, sectors reliant on exports faced headwinds due to the threat of US tariffs on local products, putting pressure on industries such as agriculture and automotive manufacturing. Additionally, companies like Sasol and Impala Platinum reported lower sales volumes, highlighting ongoing challenges in the resource sector. Looking ahead, investors will be closely watching upcoming economic data releases and developments in US-China trade negotiations to assess the market’s sustainability.

US stocks rebounded on Monday, with the S&P 500 rising 1.50%, ending a four-day losing streak. The Dow surged 585 points, and the Nasdaq gained 1.90%, as investors snapped up shares following Friday’s sell-off. The rally was driven by renewed optimism for a potential Federal Reserve (Fed) rate cut in September, following a weaker-than-expected July jobs report and downward revisions to previous months’ data. In addition, tech mega caps drove the market higher as traders responded to strong corporate earnings, with 82% of S&P 500 companies beating expectations so far. Palantir rose 4.20% ahead of its post-market earnings release, while Nvidia gained 3.50%. In contrast, Amazon slipped 1.50%, and Berkshire Hathaway dropped 3% following its weekend earnings report.

European stocks ended on strong footing, rebounding from last week’s sharp losses as investors reassessed the impact of tariffs on economic growth this year. The Eurozone’s STOXX 50 jumped 1.50% to 5 242, while the broader STOXX 600 added a softer 0.80% to 540, weighed down by underperformance in Switzerland due to increased US tariffs. Looking ahead, investor focus will shift to several key events this week, including the Bank of England’s policy decision, where markets are anticipating a 25-basis-point rate cut, as well as a busy slate of corporate earnings and economic data releases.

Chinese markets traded cautiously on Monday, reflecting investor hesitation amid ongoing economic and policy uncertainty. While last week’s Politburo meeting acknowledged rising challenges such as deflation, industrial overcapacity, and a worsening property sector, the absence of meaningful stimulus measures left markets underwhelmed. The Shanghai Composite edged up 0.20% to 3 570, while the Shenzhen Component slipped 0.20% to 10 970. Focus now shifts to upcoming trade and inflation data, which may shed light on the early impact of the tentative US-China tariff truce. Although officials concluded talks in Stockholm last week, US President Donald Trump has yet to formally approve an extension of the agreement, adding to the uncertainty.

In commodities, oil prices dipped after OPEC+ agreed to raise production by 547 000 barrels per day in September, adding to supply. Brent crude fell 18 cents to $69.49, and WTI dropped 12 cents to $67.21. The increase, part of ongoing output hikes to regain market share, reverses previous cuts and includes extra supply from the UAE, totalling about 2.5 million barrels daily. Concerns over potential disruptions to Russian oil shipments to India helped limit losses. 

Gold prices slipped on Monday as investors took profits following a strong rally driven by weaker-than-expected US jobs data, which raised hopes for a Fed rate cut next month. Spot gold fell 0.10% to $3 360.62 per ounce, while US gold futures rose 0.40% to $3 412.80.