Markets hit as pandemic spreads

The JSE tracked weaker global markets on Thursday, giving up gains from Wednesday’s budget speech as the spread of the coronavirus outside mainland China increased.

Since the coronavirus crisis began in January, the number of confirmed cases outside China has begun to grow at faster than the number of new infections in China, the epicentre of the outbreak.

Fear about the global spread once again weighed on risk appetite, raising concern about how fast the virus is spreading and its effect on the global economy.

Earlier, Reuters reported that the number of new cases in China was surpassed by outbreaks elsewhere. Italy and Iran have emerged as

hotspots, resulting in further erosion in global investor sentiment.

“With the budget out the way, the key theme remains the coronavirus and the effect it will have on the global economy as more countries start expecting social and economic disruption,” said Peregrine Treasury Solutions Treasury partner Bianca Botes.

“Central bankers remain on edge as to whether further stimulus will serve as a countermeasure to the expected slower growth,” said Botes.

The JSE all share ended the day down 2.91% to 53,444.83 points and the top 40 2.96%.

Banks slumped 5.24%, financials 4.21%, and retailers 3.75%. The platinum index fell 3.15%, while gold miners gained 0.83%.

Glencore slumped 2.9% to R39.52, Anglo American 3.79% to R366.37, BHP 3.19% to R294, Assore 4.13% to

R182.64, and African Rainbow Minerals 3.85% to R148.06.

Gainers were few and far between, with Wilson Bayly Holmes-Ovcon up 3.9% to R111.44 and Raubex 1.9% to R21.50.

Gold was up 0.44% to $1,646.55/oz, while platinum fell 0.77% to $902.63. Brent crude plunged 3% to $51.84 a barrel.

After gaining a little earlier, the rand also reversed course. At 6.22pm, it had weakened 0.56% to R15.3857/$, 1.52% to R16.8842/€ and 0.48% to R19.7996/£. The euro was up 0.84% to $1.0975.

The JSE and the rand gained on Wednesday after finance minister Tito Mboweni delivered the national budget speech, which included major cuts to the public-sector wage bill along with tax relief for individuals.