Gold miners pull JSE slightly lower

The JSE closed a little weaker on Tuesday with gold miners faring worst after the sector bucked the trend by making good gains on Monday. Meanwhile, global markets stabilised after the major sell-off on Monday.

The coronavirus outbreak remains front and centre with respect to market sentiment as the spread from China to other parts of the world continues, escalating fears of the virus’s effect on global economic growth and its future prospects.

Global stock markets stabilised on Tuesday after a wave of early selling petered out and Wall Street futures managed a solid bounce back.

The gold price eased on Tuesday as investors booked profits from a jump to a seven-year high in the previous session and as equities regained some footing. But a spike in coronavirus cases outside China capped bullion’s losses, Reuters reported.

The JSE all share ended the day down 0.13% at 54,809.51 points, while the top 40 was flat. Banks were down 0.96% and financials 1.02%. Gold miners slumped 4.98% and the platinum index fell 1.34%.

Gold fell 0.28% to $1,654.26/oz and platinum 1.21% to $948.87. Brent crude fell another 0.62% to $55.64 a barrel.

China reported 77,658 confirmed cases on Tuesday, with 2,663 deaths. South Korea, Italy and Iran have all had a sharp uptick in infections, with many other countries imposing travel restrictions. On Tuesday, the World Health Organisation (WHO) warned countries to be prepared for the virus.

The WHO’s live tracker reported 80,353 confirmed cases and 2,707 deaths late on Tuesday afternoon.

“The stock market bounce was modest and short-lived in early European trade on Tuesday, as investors continue to fret about the likelihood of the virus becoming a full-blown pandemic,” said Oanda senior market analyst Craig Erlam.

“The spikes in the number of cases in South Korea, Italy and Iran has made investors very nervous and with cases being confirmed in other countries all the time, they are right to be so.

“Buying the dips has proven a good strategy at times over the years, with markets recovering much quicker than they arguably should, but more patience may be required this time,” said Erlam.