MARKETS WRAP

THE RAND powered to its firmest in almost a week yesterday, climbing down from an all-time low as some investors banked profits while risk sentiment was cheered by signs the spread of the novel coronavirus was easing.

At 5pm, the rand was 1.84 percent firmer at 18.71 to the dollar, having kicked-off the session at R19.09 and looking poised for further falls after Fitch slashed the country’s debt deeper into sub-investment-grade late on Friday.

The JSE Top40 index rose 4.06 percent to 42 534.54 points and the all share index climbed 3.68 percent to 46 240.35 points.

“Markets are continuing to rebound from oversold levels,” said Shaun Murison, a senior analyst at IG Markets.

“The dollar has reversed earlier gains and we’re seeing a recovery in EM (emerging markets) currencies. The rand is coming from severely depressed levels with the suggestion that perhaps it is undervalued at current levels,” said Murison.

The rand crashed to an all-time low of R19.3590 between late Friday and early Monday as the shock of the second ratings downgrade in as many weeks rippled through markets, but saw some strong bids late in the session as investors eyed high-yielders.

Risk sentiment was soothed by signs that the spread of the novel coronavirus in the US and Europe could be tapering.

France’s daily death toll fell in the past 24 hours, Italy reported its lowest daily Covid-19 death toll for more than two weeks and Spain’s pace of new deaths slowed.

Bonds also firmed, with the yield on the benchmark issue due in 2030 down 12 basis points to 11.315 percent.

The central bank said on Monday growth in 2020 could contract by as much as 4 percent due to the coronavirus lockdown.

Meanwhile, most developing world stocks rose yesterday and European currencies gained as investors took heart from a slowdown in coronavirus-related deaths and new cases in Europe.

The death toll from the virus appeared to be slowing across several European countries and the rate of new cases in Italy – the worst-hit country in Europe – also dipped.

MSCI’s index of emerging market stocks added some 1.3 percent earlier in the day, while Hungary’s forint, the Czech koruna and the Polish zloty all rose between 0.3 percent to 0.8 percent against the euro in early trade. I Reuters