Good news lifts the JSE and rand

The JSE closed firmer for a second trading session on Tuesday, taking its cue from positive global markets as optimism around a fall in Covid-19 infection and death rates in a number of countries pushed stocks higher. Some investors are optimistic that the coronavirus pandemic has peaked.

Global markets rallied on the day as early signs began to show that countries worst hit by the virus are seeing significant improvements. The number of deaths related to the coronavirus fell for a fourth successive day in Spain, with Italy reporting the lowest number of new infections in nearly three weeks.

By the close, the JSE all share was 2.72% higher at 47,4496.72 points and the top 40 gained 2.48%. The resources index firmed 4.11%, banks 6.72% and financials 4.95%. Of the major indices, all of which gained, platinums led, rising 11.26%.

“Falling infection and death rates from Covid-19 in the worst of the European and US epicentres have inspired markets that the outbreak is peaking,” said Oanda senior market analyst Jeffrey Halley.

RECOVERY TRADE

“Whether this is, in fact, the case or not, and frankly I have my doubts, a world hungry for any good news has leapt on board the recovery trade, with equities in particular outperforming.”

Oil rose on Tuesday amid hopes that the world’s biggest producers of crude will agree to curtail production as the coronavirus pandemic ravages the global economy, even as analysts cautioned that the cuts may do little to boost demand, reported Reuters. The world’s main oil producers, including Saudi Arabia and Russia, are expected to meet on Thursday.

Gold lost 0.35% to $1,654.84/oz, while platinum gained 1.25% to $743.87. Brent crude was up 0.12% to $33.36 a barrel.

The rand rose along with most of its emerging-market peers. By 5.35pm, it had firmed 2.36% to R18,2148/$, 1.52% to R19.8329/€ and 1.58% to R22.4607/£. The euro was up 0.85% to $1.0885.

Lockdown measures seem to be working in countries other than SA, with the expectation that life may soon at least start to return to normal. SA’s lockdown is due to end on April 16.