JSE reacts on a positive note to the US relief plan

JOHANNESBURG – SOUTH African stocks ended the day on a positive note ahead of the release of the gross domestic product data for the fourth quarter of 2020.

The JSE All Share Index closed trading 0.23 percent higher to 68 426 index points as global investors digested progress towards a long-awaited US Covid relief package. The US Senate passed President Joe Biden’s $1.9 trillion (R29.15trln) Covid-19 relief plan on Saturday, which would be one of the largest stimulus packages in US history.

Local stocks had been on a rise and produced a fourth consecutive positive monthly return having rallied 26 percent since the start of November 2020.

Old Mutual Investment strategist Izaak Odendaal said the market benefited from the recent surge in commodity prices, with the JSE’s resources index more than doubling from the March 2020 low.

“The bottom line is that, generally speaking, commodity prices have received a big boost from strong post-lockdown global growth and restricted supply,” Odendaal said. “The local economy and the JSE are benefiting from the upswing in commodity prices, but the day will come when prices turn again.”