Johannesburg’s benchmark stock index is on track for its worst month in nearly two decades, as the war in Iran dampens demand for emerging-market assets and plunging precious-metal prices hit South Africa’s miners.
The FTSE/JSE All Share Index fell 13% in the month through March 27, the steepest monthly decline since September 2008 during the global financial crisis, according to Bloomberg data.
The precious metals and mining sector, which makes up about a quarter of the index, has slumped 27% since the Middle East conflict began, erasing the year’s earlier gains as gold and platinum prices fell.
The selloff is part of a broader retreat from emerging-market stocks, driven by fears that soaring oil prices will fuel inflation and force central banks to raise interest rates.
Rally Unwinds Amid Rising Oil Prices
South African stocks had been among the world’s top performers over the past year. The FTSE/JSE All Share Index climbed 44%, recording its longest streak of monthly gains since records began in 1995. The rally was driven by soaring gold and other metal prices, a stronger rand, and signs of easing inflation. February alone posted a 7% gain, the largest monthly advance in over two years, led by metals and mining stocks.
But with oil prices above $100 a barrel and investor sentiment shaken by the Middle East conflict, much of that optimism has been unwound. Losses are broad, with construction, materials, retail, and banking sectors all down more than 10% this month.
Some investors remain bullish, viewing the decline as a buying opportunity. Analysts warn that a prolonged Iran conflict could deepen the selloff.
The South African Reserve Bank recently raised inflation forecasts, signalling higher interest rates ahead, which could weigh on growth and pressure sectors beyond mining.
