Stocks surge on the back of additional Fed stimulus pledge

The JSE had a seesaw session on Thursday as it swung between gains and losses before closing firmer on the day.

Gains across most global markets strengthened in the afternoon session as the US Fed announced a series of steps to inject a further $2.3 trillion in additional aid to cushion the impact of the coronavirus. Local stocks opened mildly softer as they struggled for direction, but the news of the US Fed stimulus saw momentum build up in the afternoon session.

The news of increased stimulus resulted in the US dollar slipping further as investors looked for more riskier assets. The rand strengthened back below R18/$ as it reached a session high of R17.85/$ and looked set to strengthen further ahead of the Easter holiday. At 17:00, the rand was trading 1.6% firmer at R17.88/$.

On the JSE, KAP Industrial Holdings [JSE:KAP] was one of the day’s biggest movers after the share rallied 23.53% to close at R2.10, while Motus Holdings [JSE:MTH] surged 15.12% to close at R36.93. Listed property stocks found some momentum on the day as significant gains were recorded for Redefine Properties [JSE:RDF] which gained 23.04% to close at R2.67, Growthpoint Properties [JSE:GRT] which surged 11.34% to close at R13.75, and Resilient [JSE:RES] which closed at R38.10 after adding 11.47%.

Retailers were buoyed by the firmer rand which saw Truworths [JSE:TRU] gain 12.47% to close at R31.21, while The Foschini Group [JSE:TFG] added 11.02% to close at R81.80. Financials also tracked higher as Nedbank [JSE:NED] climbed 9.63% to close at R111.00, while Old Mutual [JSE:OMU] gained 1.38% to close at R11.77. Gains were also recorded for Barloworld [JSE:BAW] which rose 12.28% to close at R69.10, as well as African Rainbow Minerals [JSE:ARI] which advanced 8.65% to close at R121.80.

A handful of stocks recorded big declines on the day. Construction firm, Raubex [JSE:RBX] fell 1.3% to close at R19.00, while Transaction Capital [JSE:TCP] weakened by 2.49% to close at R15.30. Tiger Brands [JSE:TBS] dropped 3.65% as it closed at R171.15, AB InBev [JSE:ANH] retreated 1.29% to close at R853.30.

Relatively modest losses were recorded for Naspers [JSE:NPN] which shed 0.12% to close at R2588.60, as well as Richemont [JSE:CFR] which closed 0.81% softer at R100.83. Sibanye Stillwater [JSE:SSW] slipped 0.44% to close at R29.10, while Reinet [JSE:RNI] closed at R276.86 after losing 0.41%.

JSE winners and losers, 9 April 2020.

The JSE Top-40 index eventually closed 2.49% higher while the broader JSE All-Share index gained 2.83%. The financials index jumped 5.83%, while the industrials and resources indices gained 1.32% and 3.54% respectively.

Brent crude continues to ride the wave of optimism which is currently engulfing the stock markets. The commodity was trading 3.47% firmer at $33.95/barrel just after the JSE close.

At 17:00, gold was up 2.34% at $1683.51/Oz, platinum had gained 1.55% to trade at $744.86/Oz, and palladium was 0.8% weaker at $2166.43/Oz.

*Musa Makoni is a trading specialist at Purple Group

ZAR/USD
17.63
(-0.14)
ZAR/GBP
23.01
(-0.05)
ZAR/EUR
20.78
(-0.04)
ZAR/AUD
12.62
(-0.03)
ZAR/JPY
0.17
(-0.02)
Gold
2034.21
(+0.05)
Silver
28.28
(+0.09)
Platinum
961.50
(+0.38)
Brent Crude
44.55
(-1.53)
Palladium
2166.01
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All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
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