South Africa’s main stock benchmark in Johannesburg is heading for its sharpest monthly decline in almost twenty years, as conflict involving Iran weakens appetite for emerging-market investments.
The downturn has been worsened by falling precious metal prices, which have heavily impacted the country’s mining sector alongside reduced investor demand.
Data from Bloomberg shows the FTSE/JSE All Share Index dropped 13% through March 27, marking its steepest monthly fall since September 2008 during the global financial crisis.
Mining and precious metals stocks, which account for roughly a quarter of the index, have plunged by 27% since tensions in the Middle East escalated, wiping out gains recorded earlier in the year as gold and platinum prices declined.
This market slump reflects a wider pullback from emerging-market equities, driven by concerns that rising oil prices could accelerate inflation and push central banks toward tighter monetary policy.
South African equities had previously been among the best performers globally. Over the past year, the FTSE/JSE All Share Index surged 44%, achieving its longest run of monthly gains since tracking began in 1995.
That strong performance was supported by rising prices for gold and other commodities, a firmer rand, and indications that inflation pressures were easing. In February alone, the index gained 7%, its biggest monthly increase in more than two years, largely driven by mining stocks.
However, with oil trading above $100 per barrel and investor confidence shaken by geopolitical tensions in the Middle East, much of those earlier gains have been reversed. Declines have been widespread, with sectors such as construction, materials, retail, and banking all dropping by over 10% this month.
Despite the downturn, some investors see the dip as an opportunity to buy undervalued stocks, although analysts caution that a prolonged conflict involving Iran could lead to further market losses.
Meanwhile, the South African Reserve Bank has raised its inflation outlook, hinting at possible interest rate hikes, which could slow economic growth and add pressure on sectors beyond mining.