The local equities market is currently experiencing mixed movements, reflecting the ongoing uncertainty and cautious optimism in global financial markets. Investors are navigating through a mix of economic data, awaiting clearer signals from central banks and significant corporate earnings that could define market trajectories in the upcoming days.
According to analysts, the bearish sentiment in the local bourse is expected to continue, as investors take profits and shift towards the fixed-income market. The equity market is likely to continue following the global business cycle, implying a tight correlation with global asset allocation decisions, which are disconnected from local economic performance.
The market composition has shifted over time, becoming dominated by Multi-National and Resources company shares, driven by global business cycles. As a result, the local equity market performance has high correlations to global asset flows and South Africa’s open financial system.
