South African markets ended lower as weakness in mining and technology stocks combined with fresh concerns over AI demand and global geopolitical risks.
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Global markets closed the week on a cautious footing as investor sentiment was rattled by fresh concerns around artificial intelligence demand, ongoing geopolitical tensions and signs of stress emerging in private credit markets.
According to Anchor Capital, South African equities were not immune, with the JSE All Share Index slipping 0.5% to close at 112,453.44 as losses among diversified miners, technology counters and gold stocks outweighed gains in insurance and property shares.
Among the biggest local decliners were BHP, South32 and Anglo American, while technology giants Naspers and Prosus also traded lower. Gold producers including Sibanye Stillwater and Harmony Gold were under pressure as bullion prices eased.
Insurance companies provided some support, with Momentum Metropolitan gaining 2.9% and Sanlam adding 2.3%, while listed property stocks such as Fairvest and Emira Property Fund also finished stronger.
One of the week's defining moments came from the United States, where semiconductor giant Broadcom plunged 12.6% after reporting weaker than expected revenue and issuing a softer outlook for AI chip demand.
Anchor Capital's morning market commentary, "Broadcom's 12.6% plunge on a revenue miss and weaker AI chip forecast is the week's most significant single stock event, introducing some scepticism into the AI demand narrative."
The development has prompted investors to question whether the extraordinary optimism surrounding artificial intelligence infrastructure spending can be sustained in the near term.
Despite the weakness in technology stocks, Wall Street ended mostly higher as hopes for a de escalation in the conflict involving Iran boosted sentiment. The Dow Jones Industrial Average gained 1.7%, driven largely by strong performances from healthcare and banking shares.
Healthcare giants UnitedHealth Group, Cigna Group and CVS Health all advanced sharply, while Goldman Sachs, Morgan Stanley and Wells Fargo benefited from improved risk appetite.
Asian markets, however, painted a more cautious picture on Friday morning. South Korea's Kospi index dropped 4.1%, Japan's Nikkei 225 fell 1.2% and Hong Kong's Hang Seng shed 0.8% as investors weighed global uncertainties.
Commodity markets also reflected shifting sentiment. Brent crude oil fell 2.8% to $95.03 per barrel after optimism emerged around a possible easing of US Iran tensions, reducing immediate concerns about supply disruptions through the Strait of Hormuz.
Gold, traditionally viewed as a safe haven asset, initially strengthened as investors sought protection against uncertainty before giving back some gains in early Friday trade.
For South Africa, the stronger rand offered some welcome relief. The local currency appreciated against the US dollar, trading at R16.33 in early morning dealings, although Anchor Capital noted that "Asian risk off sentiment" was placing some pressure on emerging market currencies.
Beyond equity markets, analysts are also keeping a close eye on growing strains in the global private credit sector. Anchor Capital highlighted that Blackstone had capped withdrawals from its flagship private credit fund after receiving $4.5 billion in redemption requests during the second quarter, while Partners Group introduced similar restrictions on one of its flagship private equity funds.
The investment house described the developments as "a systemic watch point", suggesting that liquidity pressures could become a broader concern if market volatility persists.
On the domestic corporate front, Old Mutual delivered one of the stronger performances of the week, reporting that first quarter life annual premium equivalent sales increased by 27.9% to R3.73 billion, while gross flows climbed 14.4% to R60.01 billion.
Globally, attention is also turning to ambitious investments in artificial intelligence infrastructure. France has secured proposals worth more than €110 billion for AI and data centre projects, while Goldman Sachs projects that SpaceX's AI related revenues could increase one hundred fold by 2030, supporting a potential valuation of $1.78 trillion should the company proceed with a public listing.
However, Anchor Capital cautioned that energy infrastructure constraints remain a significant hurdle for the rapid expansion of AI technologies, even as governments and investors continue to pour billions into the sector.
For investors, the combination of geopolitical risks, evolving AI expectations and signs of stress in alternative asset classes suggests market volatility may remain elevated in the weeks ahead.
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