RFA Breakfast Paper - May 20, 2026
South Africa's Inflation Jumps to 4% on Fuel and Electricity Costs
Annual inflation in South Africa accelerated sharply to 4.0% in April 2026 from 3.1% in March, slightly above market expectations and marking the highest reading since August 2024. The increase pushed inflation further away from the South African Reserve Bank’s preferred 3% target. The main drivers were housing & utilities (5.2% vs 5.1%), supported by higher electricity tariffs, and transportation (4.9% vs -1.6%), following April fuel price hikes and the delayed pass-through from elevated global oil prices linked to the Iran conflict. In contrast, food inflation eased to 2.9% from 3.6%, helped by strong agricultural output, while price growth also slowed for restaurants & hotels (5.2% vs 5.9%). Underlying inflation pressures strengthened, with core inflation rising to 3.6% from 3.2%, the highest since December 2024. On a monthly basis, CPI increased 1.1%, the strongest monthly rise since July 2022, highlighting mounting short-term price pressures.
U.S. Equities Rally as Falling Oil Prices Revive Risk Appetite
U.S. equity markets rallied strongly on Wednesday after renewed optimism surrounding a potential peace agreement between Washington and Tehran triggered a sharp decline in oil prices and improved overall investor sentiment. President Trump stated that negotiations with Iran were in the “final stages,” fueling hopes that tensions in the Middle East could ease in the near term. In response, WTI crude prices plunged nearly $10 to trade around $98 per barrel, providing relief to markets that had recently struggled with inflation and geopolitical concerns tied to elevated energy costs. The rally was broad-based across equities, with the small-cap Russell 2000 index leading gains after surging 2.4%, while the major large-cap U.S. indexes advanced between 1% and 1.5%. The sharp reversal in oil prices also helped ease pressure on financial markets more broadly, encouraging investors to rotate back into risk assets after several volatile sessions.
Nigerian Equities Extend Losses as Profit-Taking Weighs on Industrial Stocks
The Nigerian equity market closed lower on Wednesday, reversing the modest rebound recorded in the previous session as investors resumed profit-taking across major mid- and large-cap counters. The selloff dragged the NGX All-Share Index down by 1.02% or 2,573.05 basis points to close at 249,062.37, while market capitalization declined by 1.00% to settle at ₦159.66 trillion. Despite the broad weakness, the relatively smaller decline in market capitalization compared to the index reflected the impact of Eterna Plc’s additional listing during the session. Market sentiment remained largely bearish as losses across heavyweight industrial names weighed heavily on overall performance, reinforcing the cautious mood currently dominating domestic equities trading. Trading activity produced mixed results, as investors traded approximately 600.22 million units worth ₦32.72 billion across 58,958 deals. While transaction volume declined by 14.74%, the total value traded edged higher by 1.76%, suggesting that institutional participation remained active despite weaker market breadth. Sectoral performance was broadly negative, with four of the five major sectors closing in the red. The Industrial Goods sector led declines with a sharp 3.84% loss, followed by the Consumer Goods sector at 0.45%, Banking at 0.31%, and Oil & Gas at 0.10%. The Insurance sector stood out as the only gainer, advancing by 0.80%. Overall, the session reflected renewed caution among investors as profit-taking and selective positioning continued to shape market direction.
