Global market recovery lifts JSE

The JSE had its best day since December 2018 on Tuesday as global markets rebounded from Monday’s sell-off.

The local bourse gained for the first time in five days amid expectations that governments will put in place sufficient measures to mitigate the effects of the virus. Covid-19 has claimed more than 7,500 lives worldwide. There were more than 189,000 confirmed cases by Tuesday, with more than 85,000 of those recovered, according to the Johns Hopkins University coronavirus resource centre.

“Markets are becoming increasingly concerned that central banks are running out of precious ammunition to counter the coronavirus pandemic, with investors clearly adopting a ‘sell what you can’ mentality,” FXTM senior research analyst Lukman Otunuga said. “Although central banks are bringing out their big bazookas and sparing no ammunition, the focus is shifting to fiscal measures, which are seen as sharper tools in the battle to stabilise economic conditions.”

The rand was the second-best performer among emerging-market currencies tracked by Bloomberg on the day. At 6.08pm, it had firmed 0.61% to R16.5782/$, 2.51% to R18.1779/€ and 2.5% to R19.9115/£. The euro had weakened 0.42% to $1.09827.

“This recovery is tenuous as the issues that need to be resolved have not been yet. Growth has not been addressed.

“There is an expectation that there may be further measures that can help. Global dynamics are more at play now than local ones,” said Sasfin fixedincome trader Alvin Chawasema.

Gold added 1.22% to $1,532.63/oz and platinum climbed 4.31% to $689.50. Brent crude was down 0.2% to $29.76 a barrel.

The R2030 government bond was weaker, with the yield rising three basis points to 10.73%. Bond yields move inversely to their prices.

Shortly after 6pm, the Dow was up 5.82% to 21,363.19 points. In Europe, the FTSE 100 had added 1.75%, France’s CAC 40 2.27% and Germany’s DAX 30 1.96%. Earlier, the Shanghai composite fell 0.34% while Hong Kong’s Hang Seng rose 0.87% and Japan’s Nikkei 225 was flat.

The JSE all share gained 2.67% to 41,579.58 points and the top 40 advanced 2.96%. Gold miners jumped 20.65% and resources 6.33%.

Sasol’s share price dropped 17.43% to R36.94 after the company said on Tuesday that it plans to raise as much as $6bn (about R100bn). Sasol’s shares have dropped 88% so far this year.