JSE faces lockdown pressure on Tuesday
Asian markets are benefiting from optimism of an economic recovery later in 2020, and the rand has showed little reaction to the SA lockdown
The JSE could benefit on Tuesday morning from optimism that global efforts to combat the coronavirus will bear fruit, with the rand firmer in early trade despite the prospect of SA starting a 21-day lockdown on Friday.
President Cyril Ramaphosa announced on Monday night that people will be confined to their homes from Friday morning except for essential business, such as buying food or seeking health care.
All shops and businesses are to be closed, except for supermarkets, pharmacies, laboratories, banks, essential financial and payment services, petrol stations and health-care providers.
The lockdown will deal an additional blow to SA’s already struggling economy, but the rand’s reaction has been mild, and the local currency was 0.74% firmer at R17.68/$ at 6.15am on Tuesday.
Asian markets were benefiting from hopes that monetary policy easing from central banks and fiscal stimulus will result in a sharp economic recovery later in 2020, said Oanda analyst Edward Moya in a note. The US Federal Reserve in particular has unveiled a raft of measures. and is “pretty much doing everything that was asked of them to support the economy”.
Hong Kong’s Hang Seng was up 3.56% and the Shanghai Composite 1.68% on Tuesday morning.
Tencent, which influences the JSE via major shareholder Naspers, had jumped 3.39%.
Gold was up 1.55% to $1,567.50/oz, while platinum had risen 2.27% to $653. Brent crude was 0.67% higher at R27.77 a barrel.
There is little on the local corporate or economic calendar on Tuesday, and focus instead remains on just how businesses will weather the disruption caused by the viral outbreak. Many JSE-listed counters may issue trading statements to that effect in coming days.
Globally, all eyes are on the coronavirus as well, with attention on Washington as the White House tries to get a fiscal stimulus bill through Congress.