Middle East war triggers worst rout in Africa’s largest stock market since 2008

…exchange more than $160bn in March

Africa’s largest stock market, the Johannesburg Stock Exchange (JSE), suffered its worst monthly decline in nearly three decades in March 2026, as escalating conflict in the Middle East rattled global investor sentiment and erased more than R3 trillion ($160 billion) in market value.

The sharp sell-off marks the steepest monthly loss since the 2008 global financial crisis, reversing strong gains recorded earlier in the year, according to BusinessDay South Africa.

The JSE’s total market capitalisation fell to almost R23.2 trillion ($1.24 trillion) by the end of last month, down from a record R26.6 trillion ($1.42 trillion) in February — a loss of roughly R3.4 trillion ( $182 billion) in what is one of the largest value destructions in recent history.

The downturn comes after a strong run in 2025, when the bourse gained about 38 percent and closed the year with a market capitalisation of R24 trillion ($1.28 trillion) — equivalent to roughly 313 percent of South Africa’s GDP. Momentum carried into early 2026, with equities hitting record highs before the sudden reversal.

Since February 28, market sentiment has been undermined by the intensifying conflict involving the United States, Israel and Iran. The crisis has driven crude oil prices up to about $107 per barrel and disrupted tanker traffic through the Strait of Hormuz — a key route for roughly one-fifth of global oil supply — raising fears of prolonged supply shocks.

For African economies reliant on imported refined fuel, the fallout has been immediate. Higher fuel costs are feeding into transport, food and production prices, threatening to reverse recent disinflation trends and erode consumer purchasing power.

“The all share index recorded double-digit losses for the month, which will drag first-quarter returns into negative territory. Beyond heightened risk aversion, there are also sector-specific pressures,” said Izak Odendaal, investment strategist at Old Mutual Wealth.

Odendaal added that resource stocks have come under pressure as precious metal prices retreated, while higher bond yields have weighed on financials. “Nonetheless, the benchmark remains up about 30 percent over the past 12 months, still outperforming cash and inflation.”

Despite the March rout, the JSE’s longer-term performance remains robust. Last year, the market delivered its strongest return since 2005, rising 55.3 percent in dollar terms and outperforming both emerging and developed market peers, according to the South African Reserve Bank.

That rally was underpinned by improving macroeconomic fundamentals, credible policy direction and structural reform momentum, which helped push the all share index past the symbolic 100,000-point mark.

However, the Middle East conflict has abruptly halted that trajectory, triggering a broad-based sell-off across global markets.

The bond market in Africa’s most industrialised nation, has also come under pressure. Yields, which had fallen to multi-year lows before the conflict, have surged sharply, signalling rising borrowing costs for the government just as financing conditions had begun to ease.