US Federal Reserve chairman Jerome Powell. REUTERS/CARLOS BARRIA
US Federal Reserve chairman Jerome Powell. REUTERS/CARLOS BARRIA

SA stocks could benefit from the prospect of imminent interest rate cuts in the US on Thursday, as Asian markets extend the gains made this week.

US stocks rose on Wednesday as Federal Reserve head Jerome Powell said the central bank wanted to “sustain the economic expansion” amid “greater uncertainty” arising from trade wars.

“The case for somewhat more accommodative policy has strengthened,” Powell said, adding to expectations for a rate cut in July and more cuts later in 2019.

“This will set a high dovish bar for the other central banks to follow today,” analysts at OCBC Bank in Singapore said on Thursday.

“Asian markets are likely to see a firmer tone this morning,” the bank said.

Hong Kong’s Hang Seng index rose 1% on Thursday morning, while China’s Shanghai Composite rallied 2.6%. Japan’s Nikkei 225 gained 0.7%, Korea’s Kospi 0.3%, and Australia’s main benchmark 0.4%.

Chinese internet and gaming giant Tencent extended its strong run since the start of the week, gaining 1.6% on Thursday morning. That suggests another positive start for major shareholder and JSE-heavyweight Naspers.

BHP Group, the JSE top-40 index’s third largest constituent, was 0.6% down in Australia.

No major company results are expected on the JSE on Thursday, although Group Five’s business rescue practitioners will brief shareholders on efforts to save the contractor.

Novus executives will brief the market on the company’s 2019 annual financial results. 

Later on Thursday, SA President Cyril Ramaphosa will present his state of the nation address. Traders will keep a close eye on his plans to fix power utility Eskom and around land reform.

Earlier in the day, Statistics SA will publish civil debt cases data and private-sector building figures for April.

Elsewhere, the US will release initial jobless claims data and the UK will publish retail sales numbers.

The rand, which has been on a winning streak over the past week partly thanks to optimism that the US and China will resolve their trade dispute, was at R14.31/$, R18.14/£, and R16.12/€.