Picture: 123RF/PHONGPHAN
Picture: 123RF/PHONGPHAN

The JSE’s recovery may continue on Wednesday morning, after US markets had their best day since 1933 on Tuesday on news that US legislators were close to finalising a colossal stimulus bill aimed at counteracting the economic damage caused by the coronavirus outbreak.

The Dow jumped 11% on Tuesday as Wall Street cheered the prospect of an aid package targeting economic sectors hit hard by the pandemic. This follows unprecedented liquidity injections from the US Federal Reserve.

The JSE gained more than 7% on Tuesday as well, its best day since 1997, and there are hopes that the worst has passed for the local bourse, which has still lost more than a quarter of its value so far in 2020.

“Everyone is looking for a canary in the coal mine,” said AxiCorp chief Asia markets strategist Stephen Innes in a note. “Still, ultimately for risks sentiment to turn back on bright, investors need conclusive evidence of coronavirus infection curves flattening, bringing an end to lockdowns in sight,” he said.

Asian markets extended their gains on Wednesday morning, with Japan’s Nikkei leading the gains in adding 5.58%. Hong Kong’s Hang Seng was up 2.12% while the Shanghai Composite had risen 1.57%.

Tencent, of which Naspers is a major shareholder, added 2.68%.

Gold was down 0.65% to $1,612/oz while platinum had added 2.95% to $727.44. Brent crude had gained 0.68% to $27.88 a barrel.

There is little on the local corporate or economic calendar on Wednesday, and focus is instead on SA’s looming 21-day lockdown on Friday morning. Numerous JSE-listed counters have issued coronavirus updates, with some delaying or even cancelling recent dividend announcements in order to shore up their balance sheets.