Stock Market Rally Faces Potential Sluggishness in Thailand
The Asian markets are treading with caution as they await the Federal Reserve's monetary policy announcement later today. This decision is expected to have a significant impact on the outlook for interest rates.
Meanwhile, the Stock Exchange of Thailand (SET) is currently holding steady above the 1,230-point plateau, following a 1.6 percent rise in the past two sessions. The SET finished sharply higher on Tuesday, with gains from the food, consumer, finance, industrial, property, resource, and service sectors. For the day, the SET index jumped 16.53 points or 1.36 percent to finish at 1,233.68.
In the United States, the Labor Department released a report on U.S. job openings for June, which showed a slight decrease compared to expectations. The NASDAQ and the S&P 500 reached new record highs in the recent upward trend on Wall Street, but the Dow slumped 204.57 points or 0.46 percent.
The Fed's decision comes at a time when market participants are uncertain due to conflicting signals from recent US economic data and trade developments. Asian equities show mixed performance, with some markets like Australia rising slightly, while South Korea saw declines, and Japan's Nikkei-225 was flat. The MSCI Asia Pacific Index advanced modestly by 0.2%.
Sentiment was recently supported by hopes of a US-China trade deal and strong tech earnings in the US, which bolstered some Asian market gains. However, fears remain from the US increasing tariffs on India and tariff uncertainty generally. Retail sales growth in Singapore exceeded expectations, but was affected by seasonal factors, adding to the mixed domestic picture in Asia.
Currency markets in Asia are expected to weaken due to uncertainty after the Fed’s decision to hold interest rates steady near 4.25%-4.5% and avoid signaling imminent rate cuts. This has unsettled bond traders and currency markets.
Analysts anticipate Asian equity fluctuations and currency pressure ahead of and following the FOMC decision, as markets weigh steady Fed policy against geopolitical trade tensions and uneven economic data.
The Conference Board published a report on U.S. consumer confidence for July, which showed a modest improvement. Volume for the day was 9.354 billion shares worth 51.323 billion baht.
Elsewhere, the U.S. deadline for Russia to finalize an agreement with Ukraine or face sanctions is approaching. European markets were up, while U.S. bourses were down, and Asian markets are expected to follow the U.S. lead.
In the SET, there were 327 gainers, 140 decliners, and 190 stocks that finished unchanged on Tuesday. Active stocks with significant movements include Advanced Info (down 0.34 percent), Asset World (down 0.95 percent), Banpu (up 3.46 percent), Bangkok Bank (up 1.69 percent), Bangkok Dusit Medical (up 1.43 percent), B. Grimm (up 5.41 percent), BTS Group (up 2.31 percent), CP All Public (up 1.61 percent), Energy Absolute (up 2.82 percent), Kasikornbank (up 0.94 percent), Krung Thai Bank (up 0.47 percent), Krung Thai Card (up 2.70 percent), PTT Oil & Retail (up 2.31 percent), PTT (up 2.33 percent), PTT Exploration and Production (up 5.60 percent), PTT Global Chemical (up 10.65 percent), SCG Packaging (up 7.91 percent), Siam Commercial Bank (up 1.21 percent), Siam Concrete (up 2.50 percent), Thai Oil (up 7,69 percent), True Corporation (down 0.93 percent), TTB Bank (up 1.06 percent), Charoen Pokphand Foods (unchanged), Thailand Airport (unchanged).
- Despite the uncertain times due to conflicting signals from recent US economic data and trade developments, some investors might decide to allocate their resources toward Asian businesses, especially given the recent growth in the Stock Exchange of Thailand (SET) and the potential of the tech sector.
- As the Federal Reserve's monetary policy announcement looms, investors in the stock-market may strategize their investments considering the potential impact of the decision on interest rates, as well as ongoing geopolitical trade tensions and uneven economic data in Asia.
