April was a turbulent but ultimately positive month for global markets. Despite a rocky start due to escalating U.S. tariff announcements, markets regained their footing toward the end of the month following a temporary pause on most tariff measures. Developed markets ended the month modestly higher, with the MSCI World Index up 0.9% for April but still down 1.7% year-to-date. Emerging markets fared slightly better, gaining 1.3% for the month, supported by a weaker US dollar and improved investor sentiment in select regions.
LOCAL MARKETS
Exhibit 1 | Local Performance (ZAR) for April 2025
Source: Factset. Data as at 30 April 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
South Africa
Economy
The rand weakened by 1.5% against the U.S. dollar over the month, partly due to global risk-off sentiment following heightened tariff talk, but remains slightly stronger year-to-date. South Africa’s trade surplus grew to R24.8 billion – the highest in four months – further supporting local assets.
Despite ongoing political uncertainty and global trade tensions, South Africa’s economy showed some resilience in April. Encouragingly, headline inflation dropped to 2.7% year-on-year – the lowest since mid-2020 – thanks to easing fuel prices and lower-than-usual education costs. This points to reduced price pressure for local consumers and may provide more flexibility for interest rate cuts later in the year.
Plans to increase VAT by 0.5% on 1 May were officially scrapped after facing political pushback within the Government of National Unity. A revised version of the Budget will now be tabled in Parliament on 21 May, marking the third attempt to secure its approval.
To understand the potential impact of the U.S.’s new tariff measures, it’s important to consider the trade relationship between South Africa and the United States. In 2023, South Africa exported roughly $13 billion worth of goods to the U.S. (around 3.6% of our GDP and 7% of our total exports), making the U.S. our second-largest trading partner after China.
Fortunately, South Africa was granted a temporary exemption from the harshest tariff increases, with nearly half of our U.S.-bound exports (including platinum, gold, and aluminium) spared during a 90-day pause. This offers critical short-term relief, but key sectors, like automotive and agriculture, remain vulnerable if trade negotiations stall.
Equity Markets
Local equity markets performed strongly in April. The JSE Top 40 Index rose by 4.5%, with gains seen across the board. The Capped SWIX index was up 4.3%, supported by a recovery in resource and industrial shares. Listed property was the standout performer, gaining 7.6%, while industrials also rallied nearly 5.3% during the month. Gold shares drove resource stocks higher, although platinum counters remained under pressure. Financials were modestly positive, up 4.8%.
Top performers for the month:
- Clicks Group 16.8%
- AngloGold Ashanti 13.0%
- Woolworths Holdings 12.9%
Worst performers for the month:
- Aspen Pharmacare -25.6%
- Sasol -16.1%
- Implats -11.95%
Bond Market:
South African government bonds remained relatively steady in April, with the benchmark 10-year bond yield ending the month flat at 10.6% per year. However, this calm finish masked some volatility during the month, as yields briefly spiked above 11.2% before retreating. These fluctuations reflect global uncertainty and shifting investor sentiment amid ongoing tariff tensions and local political developments. Despite the noise, South African bonds continue to offer attractive yields compared to global counterparts, particularly for long-term, income-focused investors.
GLOBAL MARKETS
Exhibit 2 | Global performance (base currency) for April 2025
Source: Factset. Data as at 30 April 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
United States
While the economy started the year with solid momentum, boosted by strong service sector activity, the aggressive shift in trade policy has clouded the outlook. The latest U.S. GDP figures showed a surprise contraction of 0.3% in the first quarter – the first negative growth print since 2022. Consumer confidence dropped to its lowest level since COVID-19, and while inflation moderated slightly in March (with headline CPI at 2.4%), core inflation and the Fed’s preferred measure both ticked up. This has made it harder for the Federal Reserve to justify rate cuts. With tariffs likely to keep costs elevated and global demand facing pressure, economic growth is expected to slow significantly for the remainder of the year.
Markets also experienced extreme swings in April, reacting sharply to policy news. After falling almost 19% from February highs (due to fears over tariffs and possible retaliation from major trade partners like China), U.S. equities managed to recover some ground later in the month. President Trump’s 90-day pause on tariff escalation helped calm investor nerves, leading to a relief rally across major indices.
Despite volatility, corporate earnings came in well above expectations, with around 70% of S&P 500 companies reporting an average earnings growth of 15% year-on-year. While standout results from companies like Netflix (+21%) supported the rebound, others like Starbucks (-18%) missed the mark, showing that business conditions remain mixed. The S&P 500 ended the month down just 0.7%, while Tech-heavy Nasdaq managed a gain of 1.6%.
United Kingdom
UK inflation continued to ease in March, with headline inflation falling to 2.6% and core inflation slowing to 3.4%. Despite the improving inflation backdrop, UK equities lost some ground in April, with the FTSE 100 down 0.7% for the month.
Europe
Inflation in the Eurozone continued to cool, with March headline inflation easing to 2.2% and core inflation dropping to 2.4% – the lowest since late 2021. The euro rallied strongly, gaining around 5% against the US dollar, helped by optimism around Germany’s fiscal support plans and concerns over U.S. economic policy. European equity performance was mixed in April. Germany’s DAX rose by 1.5%, continuing its strong year-to-date run of 13.0%, while France’s CAC fell 2.5%.
Asia
Asian markets were mixed in April. Chinese equities came under pressure as the country remained excluded from the US’s 90-day tariff pause and now faces a steep 145% duty on exports to the U.S. China’s manufacturing activity contracted, with its Purchasing Managers’ Index (PMI) dropping to 49.0 (the lowest in 16 months) – reflecting weaker trade momentum. PMI is a key measure of factory and business activity, with a reading below 50 signalling a contraction. The Hang Seng fell 4.0%, and the Shanghai Composite slipped 1.6%.
In contrast, Japan’s Nikkei gained 1.2%, rebounding slightly from March’s losses, even as concerns over global trade persisted. More broadly, Asian markets were supported by gains in India, South Korea, Taiwan, and Mexico, which helped offset the drag from China.
Commodities
Commodities saw sharp divergence in April. Gold continued its strong run, rising 5.3% for the month and reaching a new record high of $3,500 per ounce, as investors sought safety amid global trade tensions. Platinum group metals lost some ground, with platinum, palladium, and rhodium all ending the month lower. Oil prices came under pressure, with Brent crude falling 15.5% after the Organisation of the Petroleum Exporting Countries (OPEC+) unexpectedly agreed to boost supply.
Outlook
The global economy faces growing uncertainty. While recent data remains solid, the International Monetary Fund (IMF) has cut its 2025 growth forecast to 2.8% as trade tensions and rising tariffs cloud the outlook. The US-China tariff dispute is especially concerning, with potential knock-on effects across global markets.
In the short term, factors like strong US consumer spending and falling energy prices are helping to support growth. However, if trade negotiations fail, we could see slower economic activity and renewed market volatility. Even if tensions ease, we expect a softer patch in the middle of the year as businesses pause investment and hiring.
In South Africa, new US tariffs may hurt key export sectors like agriculture and autos. At the same time, slow reform and political uncertainty within the Government of National Unity (GNU) continue to weigh on confidence. Local growth expectations have been revised lower.
Given this backdrop, we remain cautious. Portfolios are positioned for resilience, with a focus on quality, diversification, and long-term discipline. In uncertain times, staying invested and avoiding knee-jerk decisions is key.
