MARKET WRAP: JSE has best day in a year as global mood lifts

The JSE had its biggest one-day gain since January 2019 and the rand rose for a second consecutive day on Tuesday as global markets recovered despite the coronavirus death toll rising to more than 420.

“The recovery in risk sentiment may be based around official efforts to calm virus fears, China’s central bank pumping 1.2-trillion yuan into the economy, and the unexpected rebound in US manufacturing overnight,” said FXTM senior market research analyst Lukman Otunuga said.

Shortly after the JSE closed, the Dow was up 1.52% to 28,831.84 points. In Europe, the FTSE 100 added 1.32%, France’s CAC 40 1.47% and Germany’s DAX 30 1.56%. Earlier, the Shanghai Composite rose 1.34%, Hong Kong’s Hang Seng 1.21% and Japan’s Nikkei 225 0.49%.

The death toll from the virus has risen by more than 100 people over the past two days, to 427, with the second fatality outside mainland China reported in Hong Kong.

 “With China also welcoming assistance from the US to fight the virus outbreak, this could sweeten appetite towards stock markets in the near term. However, rising fears around the virus spreading further and destabilising the global economy will most likely create obstacles for equity bulls down the road. When risk aversion makes an unwelcome return, market players are poised to rush towards safe-haven assets such as the dollar and gold,” Otunuga said.

The rand entered its second day of gains and was the best-performing among emerging-market currencies on the day. At 5.29pm, it had strengthened 0.75% to R14.75820/$, 1.04% to R16.16.2887/€ and 0.61% to R19.22620/£. The euro had weakened 0.20% to $1.10387. 

“A recovery in global risk appetite at the start of the week appears to have been one factor supporting the rand’s recovery,” said Mercato Financial Services analyst Nico du Plessis.

Gold was down 1.48% to $1,555.12/oz and platinum 0.25% to $963.52. Brent crude added 0.64% to $54.82 a barrel. 

The JSE all share gained 1.77% to 56,817.03 points and the top 40 1.98%. Banks rose 2.13% and the platinum index 6.29%.

Impala Platinum jumped 6.98% to R151.37, Anglo American Platinum 6.53% to R1,252.72, Royal Bafokeng 4.55% to R53.27, and Northam 4.48% to R130.01. 

City Lodge said on Tuesday that it expects normalised, diluted headline earnings per share to have decreased between 49% and 54%, or between 191.3c and 172.6c, in the six months to end-December 2019. The company said normalised, after-tax profit in SA, the group’s primary market, is expected to fall by between 12% and 17% excluding accounting changes. Its share price fell 5.23% to R67.71. 

Vodacom said on Tuesday that its group revenue grew 6.6% to R23.6bn in the three months to end-December. It said it had added more than 2-million subscribers, 1.7-million internationally and 484,000 in SA. The company’s share price fell 1.03% to R116.32. 

mjoo@businesslive.co.za