Rand, JSE gain as Covid-19 slows

The rand came off record lows and the JSE had its best day since March 26 on Monday as global investors pinned their hope on the spread of Covid-19 continuing to slow.

The JSE rose more than 3% on the day and the rand firmed to below R19/$ after earlier hitting a record low of R19.34, according to In front data. The rand’s morning weakness came after Fitch Ratings downgraded SA further into junk status on Friday night. At 5.42pm, the rand had gained 1.48% to R18.6995/$, its biggest gain since March 24, 1.54% to R20.2055/€ and 1.19% to R22.9854/£. The euro was flat at $1.0807.

Despite Monday’s gains, Investec economist Annabel Bishop said the recent volatility in the rand remained, and the currency was still at risk. Reducing market risk aversion “very substantially” was needed for the rand to recover as it had the “additional hurdle of a deteriorated ratings outlook now”, she said.

“The rand has seen substantial, additional depreciation over and above that of a number of other emergingmarket currencies due to its downgrades from Moody’s and Fitch in the heat of the 2020 Covid-19-induced financial turmoil.”

US President Donald Trump said on Monday that he hoped that the number of Covid-19 cases was “levelling off” in his country’s hardest-hit regions. Italy, which has become the epicentre for the virus, recorded its lowest number of daily deaths in more than two weeks on Sunday.

“Some governments are targeting Easter as a time to begin rolling back lockdown restrictions. Investors are taking it as an early sign that we’re coming out the other side of the economic standstill,” said London Capital Group head of research Jasper Lawler.

The JSE all share gained 3.68% to 46,240.35 points and the top 40 4.06%. Resources rose 5.01%, financials 4.56% and banks 7.2%.

Shortly after the JSE closed, the Dow was up 4.87% at 22,077.84 points. In Europe, the FTSE 100 had added 3.10%, France’s CAC 40 4.60% and Germany’s DAX 30 5.77%.

Earlier, Hong Kong’s Hang Seng rose 2.21% and Japan’s Nikkei 225 4.24%, while the Shanghai Composite fell 0.60%.

Gold was up 1.78% at $1,647.45/oz and platinum 2.42% to $730.25.

Brent crude slumped 5.82% to $32.84 a barrel.