In this edition of Lens on Markets, we look at how
Market Commentary
South African Market Summary
South African equities weakened on Wednesday, with the JSE All Share index down 1.38% to 109,593.41 points and the Top 40 falling 1.48% to 101,656.21 points as risk appetite remained under pressure. SPAR Group weighed on sentiment after reporting a 53.9% decline in half-year headline earnings per share to 199.9 cents, reflecting operational pressures, elevated promotional activity, higher debtor provisioning and ongoing balance sheet clean-up. Novo Nordisk also drew attention as it launched High Court action in South Africa to halt the sale of unapproved semaglutide products. Meanwhile, the SARB said the financial system should remain resilient despite tighter conditions linked to the Iran war. Investors now await current account, mining and manufacturing data.
European Market Summary
European equities ended little changed on Wednesday, with the STOXX 600 slipping 0.08% to 618.17 points and closing lower for a fourth consecutive session as investors assessed renewed US-Iran tensions and awaited the European Central Bank’s policy decision. Sentiment was pressured by a weaker outlook for Germany, after the DIW economic institute warned that Europe’s largest economy could enter a technical recession this year as energy-price shocks linked to the Iran war disrupt its fragile recovery. Germany’s DAX fell about 1%. The ECB is widely expected to raise rates by 25 basis points, with investors focused on future guidance. In the UK, housing activity remained subdued amid concerns over possible Bank of England rate increases.
US Market Summary
US equities ended more than 1% lower on Wednesday as renewed US-Iran tensions, hotter inflation data and further weakness in semiconductor shares weighed on risk appetite. President Donald Trump warned that the US could strike Iran again if no peace deal is secured, adding to geopolitical uncertainty and supporting gains in oil prices and market volatility. Chipmakers remained under pressure, with the Philadelphia Semiconductor Index down 3.6% as Nvidia and Broadcom dragged on the S&P 500 amid concerns over stretched valuations. The S&P 500 technology sector is now 11% below its 2 June record, confirming a correction. Investors also digested stronger jobs data, 4.2% annual CPI inflation and expectations for another Fed rate hike this year.
Asian Market Summary
Asian equities fell on Thursday, pressured by a Wall Street sell-off after hotter-than-expected US inflation data and renewed US strikes on Iran, which pushed oil prices higher and weakened risk appetite. Regional markets are also facing heavier foreign selling, with LSEG data showing net outflows of US$27.08 billion so far in June, exceeding the combined US$24.08 billion withdrawn in May across key Asian exchanges. Sentiment has been further weighed down by a pullback in AI-linked technology stocks after underwhelming Broadcom results. In China, weaker-than-expected domestic vehicle demand remains a concern for 2026, while in Japan, proposed governance reforms could encourage companies to unlock part of their US$1.8 trillion cash reserves.
Commodity Market Summary
Gold prices rebounded from a six-month low on Thursday, supported by short-covering as investors awaited key US inflation data for further direction on the Federal Reserve’s policy outlook. Oil prices surged as geopolitical risk intensified, after Tehran declared the Strait of Hormuz closed following further US strikes against Iran, with President Donald Trump warning of additional action if no peace agreement is reached. Iran’s military said vessels attempting passage through the key energy chokepoint would be targeted, raising fears of severe supply disruption. The pressure was reinforced by a 7.2 million-barrel draw in US crude inventories, while OPEC output reportedly fell to its lowest level in more than two decades amid constrained Gulf exports.
Currency Market Summary
The South African rand was broadly steady on Wednesday as investors digested US inflation data that came in largely in line with expectations. Currency markets remained subdued as traders weighed a fragile Middle East ceasefire against renewed US-Iran strikes, which weakened risk appetite and kept the dollar volatile. US consumer inflation rose 4.2% year on year in May, the strongest increase since April 2023, adding uncertainty around the Federal Reserve’s policy path. However, economists continue to believe the threshold for further monetary tightening remains high. Encouragingly, core CPI rose just 0.2% month on month, down from 0.4% in April, supporting hopes that energy-driven price pressures may remain contained.
Domestic Company News
The SPAR Group Limited(SPP) +5.88%
SPAR reported a weaker interim performance for the 26 weeks ended 27 March 2026, despite modest revenue growth from continuing operations. Group revenue rose 3.6% to R67.5 billion, supported by resilience in the underlying business and a positive contribution from Ireland. However, operating profit fell to R740.5 million from R1.35 billion, while operating profit before extraordinary items declined to R882.0 million. Headline earnings per share dropped 53.9% to 199.9 cents, reflecting pressure on profitability and lower earnings momentum. Net debt increased to R7.3 billion, lifting group leverage to 2.73 times, although headroom remains adequate at R5.6 billion. Ireland delivered a solid result, with operating profit up 3.5% to R502.8 million.
Fortress Real Estate Investments Limited (FFB) -0.21%
Fortress reaffirmed its FY2026 distributable earnings forecast of at least R2.15 billion, translating into a minimum distribution of 176.48 cents per share, as operational momentum across its logistics and retail portfolios remained strong. The group, which owns more than R53 billion in direct and indirect real estate assets, reported low logistics vacancies of 1.4% in South Africa and 1.8% in Central and Eastern Europe, supported by strong demand for secure, premium warehousing. Retail also remained resilient, with like-for-like tenant turnover growth of 4.2% and vacancies of just 0.8%. Fortress completed 88,292m² of new logistics space, has a further 65,662m² under construction, and guided for 7.4% earnings growth in FY2027.
Global Company News
Oracle Corporation (ORCL) -2.21%
Oracle shares fell 8.9% in extended trading after the group outlined fiscal 2027 capital spending plans above Wall Street expectations, underscoring the rising cost of competing in AI infrastructure. The company expects capital expenditure of up to US$95 billion, although as much as US$25 billion could be repaid by customers, while it also plans to raise nearly US$40 billion through debt and equity financing. Oracle is expanding aggressively to support major data-centre contracts with customers including Meta and OpenAI, with its Texas “Stargate” project expected to be more than three-quarters complete within 90 days. Fourth-quarter revenue of US$19.18 billion and adjusted earnings of US$2.03 per share both exceeded expectations.
Frasers Group plc (FRAS) +4.05%
Frasers Group has launched a €2 billion takeover offer for Hugo Boss, seeking to acquire the remaining shares it does not already own in the struggling German fashion group. Frasers, controlled by Mike Ashley and already Hugo Boss’s largest shareholder with a 26.06% stake, is offering €38 per share in cash, a 4.3% premium to Hugo Boss’s previous closing price. The move would further expand Frasers’ retail portfolio, which includes Sports Direct and House of Fraser, alongside stakes in Asos, Debenhams and Currys. Hugo Boss, whose shares trade at around half their level of three years ago, said the approach was unsolicited and that its board would review the offer.
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Research Team