JSE faces mixed Asian markets on Thursday as lockdown looms
A $2-trillion stimulus bill has been approved in the US while the Reserve Bank has begun buying bonds ahead of SA’s 21-day lockdown
The JSE’s two-day winning streak is under threat on Thursday, with the local bourse contending with mixed Asian markets ahead of a 21-day lockdown that begins at midnight on Thursday.
Global markets have been buoyed this week by the passing of a $2-trillion (R34-trillion) stimulus bill in the US, which will include bailouts for various industries as well as direct payments to individuals.
Locally, the Reserve Bank has also begun buying bonds in the secondary market — effectively printing money. The rand has also benefited from a weaker dollar amid stimulus and moves by the US Federal Reserve. The local currency strengthened to as much as R17.16/$ on Wednesday, when it secured its first two-day winning streak since February.
For now, markets are riding the good news from the US stimulus package, this theme, however, is against a gloomier Covid-19 picture, National Australia Bank analyst Rodrigo Catril said in a note.
More than 20,000 people have now died from the virus and the worldwide figure of infections has surpassed the 450,000 mark, he said.
Locally, a number of JSE-listed counters have either announced they were cancelling or delaying dividends, or declaring force majeure — a legal notice allowing businesses to avoid liability for failing to meet contractual obligations due to an unexpected event.
Asian markets were mixed on Wednesday morning, with Japan’s Nikkei down 3.3%, while Australia’s All Ordinaries index has risen 3.03%. Hong Kong’s Hang Seng and the Shanghai Composite were flat.
Tencent, of which Naspers is the larges shareholder, was up 1.21%.
Gold was down 0.8% to $1,600.51/oz while platinum fell 1.7% to $724.80. Brent crude lost 0.83% to $27.08 a barrel.
The rand was 0.22% weaker to $17.35/$.
Producer inflation data for February is due later, though focus is expected to continue to be on the looming lockdown and various related coronavirus statistics.
US fourth-quarter GDP numbers due later could also receive some attention.