JSE firmer after Monday bloodbath

The JSE closed firmer on Tuesday, taking its cue from positive global markets after a slump in oil prices triggered Monday’s sell-off, which was the worst since the 2008 financial crisis.

Global stocks were hit by the twin blows of Covid-19 and oil prices collapsing on Saudi Arabia’s price war with Russia.

Investors are now pinning their hopes on economic stimulus measures aimed at bolstering the global economy.

On Monday, US President Donald Trump said he would be taking “major” steps to prepare the US economy for the effect of the coronavirus. The Japanese government is planning to spend more than $4bn in a second stimulus package to cope with fallout from the spreading virus.

“A co-ordinated response will be required from monetary and fiscal authorities around the world to restore confidence in the markets,” said Oanda senior market analyst Jeffrey Halley.

“It is also important to realise that any moves made will not be a magical panacea for the ills sweeping the globe. They can only mitigate the situation, not make it go away.”

On Tuesday, oil prices jumped by about 8% after the biggest rout in nearly 30 years, as Russia signalled that talks with oil cartel Opec remained possible.

Also on Tuesday, Reuters reported that Russian energy minister Alexander Novak was not ruling out joint measures with Opec to stabilise the market. He said that the next Opec+ meeting was planned for May or June.

But in response, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman told Reuters he did not see a need to hold an Opec meeting in May or June if there was no agreement on what measures should be taken to deal with the effect of the coronavirus on oil demand and prices.

The JSE all share ended Tuesday 1.32% higher at 49,466.01 points and the top 40 gained 1.29%. Industrials were up 1.73%, banks 1.85% and financials 1.68%.

Gold miners dropped 7.7% and the platinum index 2.52%.

The rand also had a mild recovery on the day, and by 6.10pm was up 0.71% at R15,9973/$, 1.39% at R16.1739/€ and 1.74% at R20.6970/£. The euro was down 1.01% at $1.1339. The rand is down more than 14% against the dollar so far in 2020.