According to BusinessTech, South Africa’s benchmark stock index recorded its most oversold reading in 17 months after a near R1.6 trillion sell-off in September.
The FTSE/JSE Africa All-Share index dropped 6.7% in the month, with precious-metal miners losing more than 17% as gold and platinum prices fell. Bloomberg data shows the sell-off erased more than R1.61 trillion from the index’s market capitalisation.
The 14-day relative strength index (RSI, a momentum indicator that measures the speed and magnitude of recent price moves) fell below 30 this week, the first sub-30 reading since April 2025. Technical analysts often view an RSI under 30 as a sign that a market may have fallen too far, too fast and could be due for a bounce.
Robert Naess, a portfolio manager at Nordea Investment Management, said the decline appears driven by sentiment and capital flows rather than fundamentals. He noted that earnings expectations have held up better than share prices and that a technical bounce is likely, but a lasting recovery will depend on a softer dollar, lower real yields to support gold, and China’s economic performance, the biggest importer of South African commodities.
The index recovered slightly on Friday, erasing a loss of up to 1.5% and trading 0.3% higher as of 14:14 local time in Johannesburg.
What this means for investors
While the technical signal suggests a possible short-term rebound, any sustained rally will likely require the macro-economic factors highlighted by Naess, a weaker dollar, supportive gold prices and a rebound in Chinese demand.
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