JSE tracks global markets higher

The JSE closed higher on Monday, tracking global markets as optimism about the reopening of economies and the US’s commitment to the US-China trade deal lifted sentiment.

“While US President Trump levelled plenty of criticism on China and went as far as to strip Hong Kong of its ‘special status’, he didn’t formally escalate tensions with China. There is relief across markets,” said London Capital Group head of research Jasper Lawler.

Trump had previously warned that the US could impose sanctions on China as Beijing looks to implement a new security law in Hong Kong.

The JSE all share rose 0.88% to 50,929.59 points and the top 40 0.87%. Industrials gained 1.24% and platinum miners 1.65%.

Earlier, the Shanghai Composite rose 2.21%, Hong Kong’s Hang Seng 3.36% and Japan’s Nikkei 225 0.84%.

In Europe, the FTSE 100 was up 1.54% and France’s CAC 40 1.56%, while Germany’s DAX was closed for the Whit Monday holiday. More European countries have gradually resumed economic activity, while locally millions of workers returned to work on Monday as the national lockdown was eased to level 3.

Shortly after the JSE closed, the Dow was up 0.18% to 25,429.12 points with investors shrugging off ongoing unrest in the US.

“While riots and violent protests may harm economic activity, especially given that many states have just begun unlocking their economies, investors do not seem to be concerned at this stage,” said FXTM chief market strategist Hussein Sayed.

“However, if protests begin to develop further and spiral out of control, potentially leading to viral transmission of Covid-19, then we may see a different reaction in markets,” Sayed said.

At 6.03pm, the rand had firmed 0.85% to R17.4000/$ and 0.73% to R19.3505/€, while it had weakened 0.32% to R21.6954/£. The euro weakened 0.12% to $1.1120.

“Rising global market confidence that the recovery in the global economy is indeed in sight, and growing optimism that the worst may be over, has driven yield seeking into riskier assets, with the rand a key beneficiary against other emerging market currencies,” Investec economist Annabel Bishop said in a note. The yield on the R2030 government bond was little changed at 8.76%. Bond yields move inversely to prices.

Gold added 0.51% to $1,740.10/oz and platinum 1.77% to $849.59.

Brent crude was down 0.21% to $37.56 a barrel.