JSE TOP-40 index. Monthly review for July

South Africa's JSE Top-40 index is entering the final phase of summer 2026 in a state of fragile equilibrium. After a turbulent period, when the market was under constant pressure from external and internal factors, the index's dynamics are beginning to show the first signs of a change in direction. In this review, we'll examine what has changed over the past month and what key levels to target in August.

JSE Top-40: Monthly Performance and Current Outlook

The index is currently trading around 102,030 points - essentially the same range it occupied 30 days ago. Visually there's barely any difference: the downtrend that began after June's price correction is still intact, but it has lost its earlier sharpness. The triggers haven't changed. Oil prices keep reacting to exchanges of strikes between the US and Iran over the Strait of Hormuz, and by July 20 the situation had escalated further: Houthi forces in Yemen declared a maritime blockade of Saudi Arabia, while Brent settled around $89 a barrel - crude is up roughly 20% over the month as the conflict has intensified. For an index where mining stocks account for 45–50% of total market cap, that remains the dominant external factor.

Monetary policy played its part too. On July 23, the SARB surprised markets by holding its repo rate steady at 7%, even as June inflation accelerated to 5% — a two-year high. The vote split 4–2, with a minority pushing for a hike. The rand weakened sharply after the announcement, losing more than 2% against the dollar, as markets had been positioned for tightening rather than a hold.

What has changed on the chart?

JSE 40 index chart, July 2026

The main difference in the second half of July is the slowdown of the downward impulse and compression of the amplitude.

: If in June each new local minimum was noticeably lower than the previous one, then starting from the second half of July, sellers hit a strong barrier.

: The market tested the psychological level in the 99,800-100,000 area, but sellers failed to settle below. The chart draws a series of equal local lows - a classic sign of seller exhaustion and the beginning of a consolidation phase.

Forecast

It's too early to call a reversal given the pressure from the Middle East and a monetary stance that remains restrictive (even without further hikes), don't expect one in August. Where the index goes from here will hinge on rand stability, global capital flows, and key data out of China, as well as how long the standoff over the Strait of Hormuz drags on.

flagged on weekly charts as a historical horizontal support level standing between the index and a deeper pullback. Current pricing is sitting right at the edge of that zone, so the coming weeks should show whether it holds. On the upside, the notable resistance is the 50-week EMA near 102,780 - a level bulls need to reclaim to make the case for a genuine phase shift.

Any reversal, if it comes, is more likely tied to a shift in the US cycle: a move by the Fed toward a lower-for-longer rate path later in 2026 could restore global risk appetite and support both the rand and the index but that's a fourth-quarter horizon at the earliest, and contingent on some resolution to the Middle East conflict.

Verdict

It's too early to talk about a full-fledged trend reversal and a transition to a bullish rally. Given the ongoing external pressures, a reversal in August is not expected. However, the technical picture indicates that the aggressive decline phase is coming to an end.