South African JSE Top 40 price forecast: index weighed down by rand, rates and growth
JSE ALL SHARE INDEX (ALSI) TALKING POINTS
- Rand strength hurts SA40.
- South African Q2 business confidence drops to 42 from 46 previously.
FTSE/JSE ALL SHARE INDEX FUNDAMENTAL BACKDROP
South African stocks took a turn lower on Wednesday despite the broader uptick in Emerging Market (EM) equity markets due to an extremely resilient rand. The rand and the JSE Top 40 index traditionally exhibits an inverse relationship and while the dollar is higher against most global currencies, the rand’s ties with the Chinese economy has provide support to the ZAR. China’s zero tolerance policy on COVID-19 has eased somewhat giving rise to commodity-linked currencies.
Most sectors are in the red today barring tech which has been propped up by Naspers Ltd (+9.5%) but overall pessimism around global growth forecasts and impending rate hikes have weighed on global equities.
FTSE/JSE TOP 40 SECTOR SUMMARY
Today’s South African business confidence miss for Q2 added to the index performance highlighting the drop in optimism from senior executives in building, trade and manufacturing sectors respectively. This marks a figure even lower than the 2021 unrest period at 43.
SOUTH AFRICA ECONOMIC CALENDAR
FTSE/JSE TOP 40 EARNINGS CALENDAR
TECHNICAL ANALYSIS
FTSE/JSE ALL SHARE INDEX DAILY CHART
SA40 price action shows the recent slump pushing off the medium-term trendline resistance zone (black). South African stocks will likely remain under pressure as global rates move higher, muted Chinese demand and soaring inflation ravages emerging market indices which leads me to believe subsequent support targets continue to be favorable.
Resistance levels:
- 65161 - 38.2% Fibonacci level
- 100-day EMA (yellow)
Support levels:
- 20-day EMA (purple)
- 63116 - 50% Fibonacci level
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
