JSE shatters records as global markets celebrate US-China trade deal

Stocks on the JSE defied disheartening local employment figures and rallied to a fresh record high on Wednesday, surging past the 93 000-points mark as the easing tensions between the US and China also buoyed global markets.

The world’s two largest economies have agreed to cut the hefty import tariffs on each other's goods for 90 days whilst negotiations for a permanent deal are underway. 

The US will lower those tariffs from 145% to 30%, while China's retaliatory tariffs on US goods will drop to 10% from 125%.

US President Donald Trump said weekend talks had resulted in a "total reset" in trade terms between the US and China.

As the markets cheered the news, the JSE All Share Index soared by 0.5% to 93 072 points on Wednesday just after beginning early morning trade before snapping those gains to end at 92 487 points by 5pm.

Investec chief economist Annabel Bishop said the JSE tended to run on the momentum behind international stock exchanges due to the international companies’ listings on it.

“When investor sentiment improves globally, such as the recent roll-back in many tariffs previously announced in April, then the outlook for global growth improves and so for equities, benefiting stock exchanges,” Bishop said. 

“Over the past weekend the US and China agreed a trade deal to cut back most of the recent tariff hikes and the sharp de-escalation in the trade war has reduced risk aversion in financial markets.” 

Leading the rally on the JSE was Sappi, which rose 3.3% to R33.34 per share and followed by Datatec at 3% higher to R63.23 per share and Truworths rose 2.9% to R76.22 per share. 

Mike Gresty, fund manager at Anchor Capital, highlighted the JSE’s biggest weighted stocks as one of the reasons for the rally.

“I note that Naspers/Prosus are up about 2.5% on the back of Tencent’s move today and its results announced after the close Hong Kong time. I suspect that has a lot to do with the overall market being up today,” Gresty said. 

The market’s cheer comes on the back of South Africa’s unemployment rate increasing to 32.9% in the first three months of 2025 from 31.9% in the last three months of 2024 as the number of the employed fell more than the decline of the labour force. 

The rising unemployment rate brings into question the government’s intervention to deal with structural constraints, deterioration in economic conditions and boost investor confidence. 

However, the JSE has risen 4.4% from a month ago and by 10.1% in the year-to-date as it has continued to break records until the onset of the trade war from the imposition of the US tariffs.  

Momentum Investments chief economist, Sanisha Packirisamy, also pointed to the global markets breathing a sigh of relief after the US and China temporarily suspended their tariffs. 

“The SA equity market is very geared to what happens globally, with a majority of its earnings coming from offshore, rather than being tied to domestic developments,” Packirisamy said.

“Trump’s backtracking on tariffs and an alleviation in volatility measures have seen the markets rebound strongly, including in South Africa.” 

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