JSE firms on vaccine optimism

The JSE closed higher for a third consecutive session on Tuesday with most of its major indices gaining as investors started pricing in a faster-thanexpected economic recovery amid optimism about a potential coronavirus vaccine.

Moderna, a US biotechnology company based in Cambridge, Massachusetts, has reported that a phase-one trial of its coronavirus vaccine has shown promising results, with signs that it can create an immune-system response. Many experts, however, believe that a safe and effective vaccine is still likely to take between 12 and 18 months to deliver for global usage.

The all share gained 1.11% to 51,950.14 points and the top 40 1.02%.

Platinum miners rose 3.56%, financials 2.52%, banks 1.27%, industrials 0.92%, gold miners 0.74% and resources 0.64%.

Market confidence was further boosted by comments made by US Federal Reserve chair Jerome Powell on Monday, saying that he has more ammunition to support the US economy if needed.

Investor focus is now on Powell and US treasury secretary Steven Mnuchin as they appear before the senate banking committee. The two are providing updates to congress on the economic response to the Covid19 pandemic.

“A vaccine is key to getting the global economy functioning properly again and accelerating whatever recovery it is we’re heading for,” said Oanda market analyst Craig Erlam.

“The fact that this trial triggered an immune response is very encouraging and if it can be repeated in larger numbers, there may be a real cause for optimism. Investors’ newfound optimism will be put to the test shortly after the open on Wall Street as Powell makes a virtual appearance before legislators with Mnuchin.

“While Mnuchin will naturally talk up the prospects for the economy, Powell has previously done less so and spooked markets last week with his downbeat assessment,” said Erlam.

The rand firmed against the dollar for a second day, reaching an intra-day best of R18.1702/$, its best level in five days. At 5.37pm, it had strengthened 0.44% to R18.2555/$, 0.32% to R19.9418/€ and 0.11% to R22.3475/£. The euro was little changed at $1.0927.

Gold rose 0.44% to $1,739.86/oz and platinum 1.81% to $834.16.

Brent crude was down 2.4% to $34.56 a barrel.