JSE rebounds as oil eases and budget looms

South African shares recovered on Tuesday, with the JSE all share index closing up 1.29% at about 110,399, after a 1.75% slide on Monday, according to Trading Economics and Investing.com data. The blue-chip Top-40 gained 1.27% to 102,553.

Banks and telecoms led the advance, with Standard Bank, FirstRand and Capitec each up about 2%, MTN up 3.2% and Vodacom up 2.1%. Gold miners were mixed, with AngloGold Ashanti up 0.6% and Gold Fields down 0.8%.

The rand traded around R16.39 to the dollar, slightly firmer on the day. Reuters reported that it was little changed in early trade as dealers kept positions flat ahead of the budget, with the benchmark 2035 government bond yielding 8.735%.

All eyes now turn to Wednesday, when finance minister Enoch Godongwana presents the medium-term budget policy statement, and Statistics South Africa releases consumer inflation and retail sales data. EWN reported that economists expect the deficit to narrow to about 3.5% of GDP this financial year, from the 4% projected in February, with the primary surplus rising to about 1.9% of GDP.

Analysts quoted by the Sunday Times estimated that revenue could exceed budget assumptions by R70bn, driven largely by stronger corporate tax collections from gold and precious metals. Business Day reported that the minister was expected to trim the 1.6% growth forecast for 2026, with the US war against Iran having hurt manufacturing and mining.

Reuters said economists polled expect inflation to quicken to 4.7% in September from 4.4% in August. The Reserve Bank has already raised its repo rate by 25 basis points to 7.25%, citing inflation risks linked to the Iran conflict and higher energy costs.

On Wall Street, the Associated Press reported that the Dow Jones Industrial Average rallied 529 points, or 1%, to 52,495.88, and the S&P 500 added 0.3% to 7,712.57, helped by strong profit reports from Equifax, Hasbro and others. The Nasdaq composite slipped less than 0.1% to 26,424.82 amid swings in artificial-intelligence stocks.

Brent crude fell 0.7% to $108.79 a barrel after nearing $112 earlier in the day, close to its highest since the war began in late February, and it has swung between $97 and $112 this month. Gold was quoted at about $4,120 an ounce late on Tuesday, with silver near $58, as expectations of further US rate rises weighed on the metal.

Sources: Trading Economics; Investing.com; Reuters; 30rates.com; EWN; Sunday Times; Business Day; FX Leaders; Associated Press; Rio Times.