JSE shares enter oversold territory after September rout

South Africa’s benchmark share index ended September at its most oversold level in 17 months after a sharp sell-off wiped more than R1.6 trillion from the market.

The FTSE/JSE Africa All-Share index declined 6.7% during September, with precious-metals miners among the hardest hit as gold and platinum prices fell, Bloomberg reported.

The decline reduced the index’s market capitalisation by more than R1.61 trillion, equivalent to about $97 billion, according to Bloomberg data.

The index’s 14-day relative strength index, a technical measure of the pace and scale of recent price movements, fell below 30 during the week. That was its first move below the level since April 2025.

A reading below 30 is commonly regarded by technical analysts as indicating that an asset has entered oversold territory.

BusinessTech reported that the previous move below 30 was followed by an 11-month rally of 57%, which ended with the outbreak of the Iran war.

South African equities have also underperformed against other emerging markets in recent months, with higher oil prices and weaker metals prices putting pressure on the country’s terms of trade.

Robert Naess, a portfolio manager at Nordea Investment Management, said technical indicators pointed to the possibility of a rebound, but that a sustained recovery would require several broader factors to improve.

These included a weaker US dollar and lower real interest rates, which would support gold prices, while China's economic performance would remain important because of its role as a major buyer of South African commodities.

Naess also pointed to Naspers, one of the largest companies in the index, whose share price is closely linked to Tencent Holdings, in which it holds a 23% stake.

He said the recent selling appeared to have been driven more by investor sentiment and capital flows than by a deterioration in earnings expectations.

The All-Share index had recovered from an intraday decline of as much as 1.5% on Friday to trade 0.3% higher by 2.14pm in Johannesburg, BusinessTech reported.