South African Stocks Rise for 6th Day, Interest Rates Cut to 7.75%

South African stocks rose for the sixth consecutive day, with the JSE index closing 0.3% higher at 85,523. Retailers led the gains, driven by an 8.3% surge in Mr Price shares. Financials and industrials also advanced, while resource-linked stocks retreated. The South African Reserve Bank cut interest rates by 25 basis points to 7.75%, citing inflation slowdown but cautioning against a cautious approach. Global investors monitored geopolitical tensions and awaited the nomination of President-elect Trump's Treasury Secretary.

South African stocks extended their winning streak to six consecutive days on Friday, with the JSE index closing 0.3% higher at 85,523. Retailers were the main drivers of the gains, propelled by an impressive 8.3% surge in Mr Price shares (JSE:MRP).

The robust performance of retailers came amid a broader uptrend in the market, with financials and industrials also advancing. Conversely, resource-linked stocks retreated, mirroring the subdued sentiment in the commodity sector.

The South African Reserve Bank (SARB) contributed to the positive market sentiment by cutting interest rates by 25 basis points to 7.75%. The central bank attributed the rate reduction to the slowdown in inflation, which has been easing and currently sits at 4.4% - below the midpoint of the SARB's target range.

However, the SARB exercised caution in its statement, emphasizing the need for a prudent approach in the future. This cautionary tone reflects the ongoing uncertainty surrounding the global economic outlook, particularly in light of geopolitical tensions and the upcoming nomination of President-elect Trump's Treasury Secretary.

According to Trading Economics, the JSE index has experienced a modest increase of 0.05% since the beginning of the year, with the main stock market index in South Africa (SAALL) trading at 78,578.94 points by the end of this quarter. Looking ahead, the SAALL is expected to trade at 75,626.16 in 12 months time.

The S&P Africa 40 index, which provides exposure to 40 of the largest, most liquid companies operating purely in Africa, has been closely tracking the performance of the JSE. As of Friday, the index was up 0.32% year-to-date.