JSE could benefit on Tuesday from hopes Covid-19 is peaking
The JSE may benefit from optimism on global markets on Tuesday morning, as Covid-19 death rates continued to fall in Italy, Spain and New York.
Hopes the pandemic is peaking has raised the prospect of restrictions being eased, but on the other hand, countries including Japan and Singapore are considering reintroducing measures to prevent a second outbreak, said National Australia Bank analyst Rodrigo Catril in a note.
“So the conclusion then is that an uplift in containment measures is great news, but in all likelihood, the removal of containment measures will be slow and the full economic impact remains unknown,” he said.
Riskier assets have benefited, and the rand has dipped back below R19/$, faring best against the pound on Monday, which was under pressure from news that UK Prime Minister Boris Johnson, who tested positive for the virus, has been moved to intensive care.
In morning trade the rand was 0.18% weaker at R18.68/$, while falling 0.58% to R22.94/£, having gained more than 2% against sterling on Monday.
The rand also found some support on Monday after the Reserve Bank signalled that there were no more interest rates cuts on the cards for SA, said Peregrine Treasury Solutions executive director Bianca Botes in a note.
Higher interest rates increases the relative attractiveness of local bonds.
Asian markets were a little higher on Tuesday, with Hong Kong’s Hang Seng up 0.28%, while Japan’s Nikkei had firmed 0.44%.
Tencent, which influences the JSE via Naspers, was up 0.42%.
Gold was 0.19% weaker at $1,657.50/oz, while platinum had risen 0.22% to $736.29. Brent crude was 2.01% higher at $34 a barrel.