From Lagos to Johannesburg: US-Iran Conflict Rattles African Stocks

Escalating tensions between the United States, Israel and Iran have triggered volatility across African equity markets, as investors retreat from risk assets and reposition into safe havens.

Markets from Lagos to Johannesburg have recorded sell-offs, cautious trading and sector rotations, driven by surging oil prices, currency pressure and global uncertainty.

Brent crude has climbed on fears of supply disruption, raising inflation risks and increasing production and transport costs for businesses across import-dependent African economies, thereby weighing on corporate earnings and share prices.

Geopolitical uncertainty has also heightened investor risk aversion, prompting capital outflows from emerging and frontier markets, while a stronger US dollar continues to pressure African currencies and dampen foreign portfolio inflows.

Between February 28 and March 14, 2026, equities in Nigeria, South Africa, Egypt and Kenya diverged, reflecting differences in oil exposure, macro fundamentals and integration with global financial markets.

NGX cap surges

A review of performances shows that trading on the Nigerian Exchange Limited (NGX) has remained with equities, extending gains despite the global uncertainty created by the US-Iran conflict.

The NGX All-Share Index rose from 192,826.78 points on February 28 to 196,968.15 points by March 14, representing a gain of 4,141.37 points or 2.15 per cent.

Market capitalisation also climbed from ₦123.763 trillion (about $82.5 billion) to ₦126.44 trillion (about $84.3 billion), indicating an increase of roughly ₦2.68 trillion over the two weeks under review.

Market analysts attribute the resilience largely to Nigeria’s status as an oil exporter, with rising crude prices boosting sentiment for energy-related equities and supporting broader investor confidence.

JSE retreats

In contrast, stocks on the Johannesburg Stock Exchange (JSE) came under pressure as global investors reduced exposure to risk assets.

The FTSE/JSE All Share Index, which closed at 128,455.68 points on February 28, fell to around 119,600 points by mid-March, reflecting a decline of roughly 8,855 points or about 6.9 per cent.

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Market capitalisation also slipped slightly, easing from roughly R20 trillion (about $1.07 trillion) to around R19 trillion (about $1.02 trillion) during the same period.

The decline highlights the South African market’s sensitivity to global portfolio flows, given its high level of foreign investor participation.

EGX holds steady

The Egyptian stock market remained broadly stable during the escalation period.

The EGX30 index traded around 47,600 points in late February and remained within the 47,600–48,000 range by mid-March, indicating limited overall movement.

Total market capitalisation edged up slightly from about EGP 3.16 trillion (about $66 billion) to around EGP 3.17 trillion (about $66.3 billion).

The stability reflects sustained domestic liquidity and relatively steady investor participation despite heightened geopolitical tensions.

NSE saw marginal gains

The Nairobi Securities Exchange (NSE) recorded modest gains during the period, although trading remained cautious.

The NSE All Share Index moved from roughly 195 points in late February to about 195–197 points by mid-March, representing a slight increase.

Market capitalisation also rose marginally from around KES 3.4 trillion (about $25.5 billion) to about KES 3.45 trillion (about $25.9 billion).

Analysts say Kenya’s market has been affected mainly by concerns about rising fuel import costs and currency pressures, though the relatively low level of foreign portfolio participation helped limit volatility.

Diverging market responses

African equities are showing mixed performance as the geopolitical tensions reshape investor sentiment.

For instance, oil exporters like Nigeria are benefiting from rising crude prices, while globally exposed markets such as South Africa’s are witnessing sharper swings due to capital outflows.

This trend highlights the growing sensitivity of African markets to global risks and shifting investor flows.

Analysts cite capital flight, market sell-off

The Lead Economist at CardinalStone, Olaolu Boboye, says the US–Iran conflict has triggered capital flight from African markets as investors shift to safe assets.

“We’ve seen about close to $40 billion… move to US Treasuries,” he said, noting that funds are also flowing into the dollar rather than gold, which is near record highs.

As a result, “investors have been pulling out their funds from… frontier markets”, leading to volatility across African equities and Eurobonds.

He described the reaction as a typical “knee-jerk” response, adding that markets may stabilise as investors refocus on fundamentals, warning, however, of rising inflation risks driven by higher energy prices.

While oil exporters like Nigeria may benefit, Boboye said the broader impact will be mixed. “Net oil exporters’ currencies are likely to be relatively stable,” he added, urging investors to focus on fundamentally strong stocks.

A Portfolio Manager at Brand Swiss, Gary Booysen, says escalating Middle East tensions have triggered broad sell-offs in equity markets, particularly in emerging economies.

Speaking on SABC News, Booysen said markets initially absorbed the shock but quickly turned negative as the conflict widened. Banking stocks fell about 4 per cent, while resource stocks dropped over 6 per cent.

He noted that rising oil prices, driven by fears of supply disruption, are fuelling inflation concerns.

“This is a move from slight risk-off to severe risk-off,” he said, adding that foreign investors are pulling funds from emerging markets, putting pressure on currencies and equities.

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