JSE could extend gains on Tuesday on stimulus and vaccine hopes

The JSE may continue to benefit from growing optimism regarding the global economic outlook on Tuesday, with investors considering the prospect of huge stimulus from major global economies.

China is flagging more stimulus at its National People’s Congress starting on Friday, the EU is edging closer to a €500bn (R10-trillion) recovery fund, and the US Federal Reserve has made clear it still has ammunition, National Australia Bank analyst Tapas Strickland said in a note.

US biotech firm Moderna has reported that a phase one trial of its Covid-19 vaccine has shown promising results, further boosting sentiment. For markets, it seems more a case of when, rather than if, a vaccine will be developed, said Strickland.

In morning trade the Japan’s Nikkei was up 1.91%, the Hang Seng 1.70% and the Shanghai Composite 0.53%.

Tencent, which influences the JSE via Naspers, gained 1%.

Gold was up 0.26% to $1,736.40/oz, while platinum fell 0.85% to $812. Brent crude was down 1.61% to $34.88 a barrel, having risen by almost a fifth over the past five days.