US stimulus rallies the JSE

The JSE followed markets around the world by rallying sharply after the US Congress agreed to a $2 trillion financial aid package as a way to offset the economic impact of the Covid-19 pandemic.

The FTSE/JSE Africa All Share Index (Alsi) reached as high as 44 206 points from its opening of 41 149, and closed 4.52% up at 43 009 points.

The rally regained some of the steep losses seen over the past few weeks as a result of concerns around the economic impact of the rapidly spreading coronavirus as well as the plunging oil price brought on by Saudi Arabia instigating a price war with Russia.

The global spread of the deadly virus and the slump in the oil price saw the Alsi fall as much as 34% from the start for the year, wiping R2.3 trillion off the market capitalisation of the JSE.

Turnaround for miners

The biggest losers in that sell-off were several of the gold mining counters. This was turned around in today’s rally, with the gold mining index rising 14.3% to 3 362 points.

Some of the biggest winners in this rise were Sibanye-Stillwater, which closed 11.89% up at R25.22; Gold Fields, rising 16.8% to R106.50; and AngloGold Ashanti, closing up 14.41% at R362.10.

Platinum mining companies also rallied, with Anglo American Platinum closing the day up 22.57% at R750.18 and Impala Platinum up 17.44% at R78.52.

The mining sector as a whole closed up almost 7.5% at 34 127 points.

Mining houses were the biggest winners, but they were not the only ones that made big gains. RMB Holdings rose almost 12% to R51.55, Discovery jumped 10.7% to R68.41 and even Old Mutual, which has seen its share price halve over the past year, was up 10.4% to R10.79 on the day.

The Top 40 Index was up 4.51% to 39 244 points with all but four of its counters rising.

Despite the strong rally, there were some notable losers. JSE Limited lost about 1%, closing at R105.99, AB InBev dropped almost 2% to R764.88 and British American Tobacco plc fell 2.22% to R508.10.

It was also another sad day for Sasol.

South Africa’s largest industrial company closed down 4.29% at R23.22. It was trading at just under R304 at the start of the year.