MARKET WRAP: JSE snaps three-day decline and rand strengthens

The JSE advanced for the first session in four and the rand strengthened as investors weighed the US pandemic relief package passed by Congress on Monday night possibly being scuppered with signs of progress in Brexit talks.

The rand traded near its strongest level since January and the all share advanced after outgoing US President Donald Trump demanded changes to the $900bn spending package, saying the direct payments to individuals should be increased from $600 to $2,000, while couples should be awarded $4,000.

Markets were initially edgy on concerns that Trump may refuse to sign the stimulus package into legislation but later shrugged off these concerns amid renewed hope of an imminent Brexit deal between the UK and the EU. 

The all share rose 0.6% to 58,987 points, and the top 40 0.6%. Index heavyweight Naspers, which accounts for about 21% of the top 40’s market value, edged up 0.2% to R3,047.24, while Nedbank climbed 5.5% to R131.85.

Fitch Ratings upgraded the national long-term ratings of SA’s five largest banks by assets to AA+ (zaf) from AA (zaf), saying their creditworthiness had improved.

In Europe, EU ambassadors in Brussels were told to be available to meet on Christmas Eve should Brexit negotiations result in a deal. The UK is set to exit the single market in eight days.

The rand traded at R14.57/$ at 5.15pm, R17.80/€ and R19.73/£. The dollar retreated against most of its developed nation counterparts.

The S&P 500 rose 0.4% to 3,701 points in early New York trading. Gold rose 0.5% to $1,872/oz, while platinum added 1.2% to $1,014/oz. Brent crude rose 1.5% to $50.79 a barrel.

The R2030 government bond was little changed, with the yield steady at 8.75%. Bond yields move inversely to their prices.

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