Picture: JSE
Picture: JSE

The JSE closed on Friday with its biggest one-day loss in a week, tracking weaker markets globally as the coronavirus spreads around the world, weighing on demand for riskier assets. Local markets had a turbulent week as SA confirmed its first case.

“It’s been a better week than last, but at the same time there’s nothing normal or settling about the wild moves we continue to see in the markets,” said Oanda senior market analyst Craig Erlam. “I guess a volatile week that ends roughly where it started should be viewed positively, given the week it followed, but there’s plenty of other red flags that suggest investors are not quite as comfortable as equity markets would have us believe.” 

It was similarly turbulent for the rand, which traded at a range between R15.8641 — its weakest level since 2016 — and R15.2139. It eventually ended the week flat at R15.6781. It was the most volatile of 24 emerging-market currencies tracked by Bloomberg, followed by the Russian rouble.

At 5.49pm, the rand had fallen 0.93% to R17.6634/€ and 1% to R20.3735/£. The euro had gained 0.65% to $1.1303.

“The rand came under pressure on Thursday as the first coronavirus case in SA became public. It’s been a really bumpy week, with numerous ups and down in the markets, with responses to the virus causing almost as much fallout in a day as the uncertainty itself,” said Peregrine Treasury Solutions treasury partner Bianca Botes.

So far in 2020, the rand has lost more than 11% to the dollar. A weaker rand, which pushes up import costs, might make it harder for the Reserve Bank to support a struggling economy by cutting interest rates.

The JSE all share lost 1.65% to 52,064.72 points at the close, the biggest drop since February 28, pushing its decline for the week to 2.58%. It’s down 8.79% so far in 2020. 

The JSE/FTSE Africa banks index fell 3.58%, while financial stocks lost 2.8%. Resources fell 2.04% and the industrial index declined 1.07%.

The platinum index rose 4.79% and gold miners 2.43%. 

Gold dropped 0.4% to $1,665.78/oz, while platinum gained 2.78% to $891.70. Brent crude dropped 8.86% to $45.56 a barrel.

tsobol@businesslive.co.za

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