Risk sentiment continues to weigh in on confidence

JOHANNESBURG – The slight rebound in global stocks experienced by the markets on Friday, following the worst trading day in decades, could be short-lived as risk sentiment continues to weigh in on confidence, economists warn.

South African stocks slightly recovered on Friday after the JSE All Share index plunged the most in more than 20 years on Thursday, losing nearly 10percent in a single day, pulled down by broad-based losses in platinum, gold, retail and banking sector stocks.

This, coupled with uncertainty over the coronavirus (Covid-19) pandemic and the US travel ban, saw a massive selling of most assets in a move into cash and liquid assets as panic grew in the markets. But stocks held firm on Friday as the oil price bounced back by more than 6percent after a more-than-30percent crash earlier in the week, offsetting some losses from coronavirus panic selling.

Brent crude gained 6.94percent to $35.13 (R567.74) per barrel.

The US and European markets also recovered slightly, but remained in negative territory after suffering their worst single-day loss since Black Monday in 1987 on Thursday.