JSE snaps three-day losing streak

The JSE recorded its first day of gains in four on Wednesday, while global markets remained mixed as investors digested the latest employment data from the US.

The ADP jobs report released on Wednesday showed that 20.2-million jobs were lost in the private sector in April, almost in line with market expectations of 20-million, as investors factored in the effect of the Covid-19 pandemic on the world’s largest economy.

Global market sentiment has been slightly helped by the easing of lockdown restrictions and the reopening of businesses in some countries. British Prime Minister Boris Johnson said on Wednesday the UK could implement easing measures by next week.

“Global financial markets have not yet entered a sustained period of substantial risk-on [sentiment], hence the general lagging of the recovery in emerging-market (EM) equity indices to those of developed-market indices, and also that of EM currencies in general, which, while having seen some strength in the latter part of April, are still substantially weaker than they were in early March,” Investec chief economist Annabel Bishop said in a note.

The JSE all share rose 1.32% to 49,831.99 points and the top 40 1.64%. Resources gained 3.22%, while banks dropped 2.67%.

Shortly after the JSE closed, the Dow was down 0.21% to 23,833.06 points. In Europe, the FTSE 100 was flat while France’s CAC 40 lost 1.11% and Germany’s DAX 30 1.15%.

Earlier, the Shanghai Composite rose 0.63% and Hong Kong’s Hang Seng 1.13%, while Japan’s Nikkei was closed for Constitution Memorial Day.

At 6.28pm, the rand had weakened 1.39% to R18.7521/$, 1.15% to R20.2771/€ and 0.75% to R23.1897/£. The euro weakened 0.34% to $1.0804.

The yield on the R2030 government bond was flat at 9.78%. Bond yields move inversely to their prices.

Gold was down 0.99% to $1,689.82/oz and platinum 1.64% to $751.15. Brent crude lost 9.30% to $29 a barrel.

“Commodity prices saw a broadbased deterioration as forecasts of the impact of Covid-19 on the global economy worsened, to a deeper and longer recession, with risks seen as tilted to the downside on both the degree and extent of disruption to economic activity,” Bishop said.