Gold shares lead JSE 4% higher
The JSE ended higher on Thursday, extending its winning streak to the third straight day, led by gold mining counters as SA prepared to enter a threeweek lockdown in which industries will be at a standstill. The FTSE/JSE gold mining index leapt 7.12%.
The JSE ended higher on Thursday, extending its winning streak to the third straight day led by gold mining counters as SA prepared to enter a three-week lockdown in which industries will be at a standstill.
The JSE all share, the broadest measure of the stock market performance, jumped 4%, with mining stocks among the biggest gainers as the price of bullion cruised higher.
“It’s been an extremely unusual month for the yellow metal, but the Fed’s huge stimulus measures appear to have hit the reset button and it has been trading a little more rationally since,” said Craig Erlam, a market analyst at Oanda.
The JSE all share jumped 4.09% to 45,046.35 points and the blue-chip top 40 index was up 4.09% at 41,110.45.
The FTSE/JSE gold mining index lifted to a record high, leaping 7.12%. The platinum index gained 2.45%. Financial services companies also featured on the gainers’ list, with banks rising 7.18% and financials gaining 7.25%.
At 6.09pm gold had gained 0.53% to $1,625.44/oz, while platinum lost 0.28% to $735.41. Brent crude was 1.71% lower at $26.84 a barrel.
In an attempt to slow Covid-19 infection rates, SA enters a lockdown period of 21 days beginning on Friday. President Cyril Ramaphosa said people would be confined to their homes from Friday morning, except for essential business, such as buying food or seeking health care.
On Wednesday, the Reserve Bank announced measures to add liquidity to the financial system, including buying bonds in the secondary market, effectively printing money.
“In an unprecedented move, the SA Reserve Bank moved to deploy quantitative easing through beginning a programme of buying government bonds. This is in an effort to ramp up stimulus in response to the severe economic challenges posed by the Covid-19 breakout and the upcoming lockdown,” Peregrine Treasury Solutions treasury partner Bianca Botes wrote in a note.
A number of JSE-listed counters have either announced they were cancelling or delaying dividends, or declaring force majeure, a legal notice allowing businesses to avoid liability for failing to meet contractual obligations due to an unexpected event, such as the effect of the Covid-19 on business operations.