JSE could recover slightly on Tuesday

The JSE may benefit from a recovery on Asian markets on Tuesday morning, after a huge sell-off on Monday, during which the JSE’s resources index fell 12%.

Markets were spooked by the prospect of Russia and Saudi Arabia flooding the market with cheap oil in a bid for market share, a move that comes as investors are still nervous about the economic implications of the coronavirus.

As markets have become more volatile, talk of co-ordinated fiscal and monetary support are getting louder, National Australia Bank analyst Rodrigo Catril said in a note.

On Monday, there was speculation that the White House is trying to put together an economic package that might include temporary expansion of paid sick leave, and a menu of policy options including tax relief and cash flow injections to help companies facing disruption, Catril said.

In morning trade on Tuesday, the rand had firmed 1.02% to R15.94/$, while most Asian bourses were recovering a little.

The Shanghai Composite was up 0.62% and Hong Kong’s Hang Seng 1.8%. Tencent, the Chinese media giant of which Naspers holds a sizeable stake, was up 2.17%.

Gold was down 0.81% to $1,666.65/oz while platinum added 1.21% to $876.33. Brent crude was 0.12% higher at $33.32 a barrel.