South African assets gain as Middle East peace hopes lift risk sentiment
South African stocks, government bonds and the rand currency strengthened in early trade on Wednesday, 6 May 2026 after US President Donald Trump signalled a possible peace deal with Iran, lifting global risk appetite and boosting demand for emerging market assets.
Source: Reuters.
- At 0802 GMT the rand traded at 16.43 against the dollar, up about 1.5% from Tuesday's close.
- Trump said that "great progress" had been made towards a comprehensive agreement with Iran and said he would pause an operation to escort ships through the Strait of Hormuz.
- The US dollar was last down about 0.3% against a basket of currencies, with oil prices also falling to trade below $110 a barrel on expectations that bottled-up supply
from the Middle East could resume. - South Africa is a net importer of petroleum products and heavily exposed to fluctuations in global energy prices.
- "The risk at the moment is asymmetric, and the rand is vulnerable to further adverse developments that could hurt the country's terms of trade
and tilt cross-border flows against the currency," ETM Analytics said in a research note. - A business survey showed on Wednesday that South Africa's private sector expanded at its fastest
in nearly four years in April. - On the Johannesburg Stock Exchange, the Top-40 index was up 2.5%.
- South Africa's benchmark 2035 government bond also firmed in early deals, with the yield down 14 basis points at 8.71%.