Economic data in China sees Asian stocks surge, Thai shares dip

Asian stocks experienced a significant surge yesterday, a continuation of the global equity rally, following encouraging Chinese economic data that sparked optimism about the imminent culmination of major central banks’ tightening initiatives. Despite the overall momentum, Thai stocks saw a slight dip of 0.3% from the prior week, closing at 1,542.03 on Friday, with an average daily turnover of 46.97 billion baht.

The Chinese yuan rose to a two-week high against the US dollar on the back of these favourable economic figures. Notably, retail sales jumped by 4.6% year-on-year in August, marking a significant increase compared to July’s 2.5%. Industrial production also saw a substantial surge of 4.5%, surpassing expectations.

However, the outlook for China’s property sector was downgraded from stable to negative by Moody’s, citing challenges to economic growth that could dampen sales. The agency predicts a 5% drop in sales over the next six to twelve months.

The European Central Bank (ECB) raised interest rates from 3.75% to 4% last Thursday, the highest since the euro was introduced, to combat persistently high inflation. However, economists believe this is likely the peak in the current economic cycle, reported Bangkok Post.

Meanwhile, oil supply cuts by Saudi Arabia and Russia could potentially lead to a significant supply shortfall, warned the International Energy Agency. This may trigger renewed price volatility, with the global oil market expected to face a deficit of 1.2 million barrels a day in the latter half of 2023.

On the tech front, Apple announced its new iPhone lineup, with Thailand earmarked as a Tier 1 market for the company. This means the iPhone 15 will be available for sale on September 22.

In the realm of politics, Pita Limjaroenrat resigned as leader of the Move Forward Party (MFP) on Friday. His resignation is to make way for his successor to assume the position of opposition leader as Pita’s MP status remains uncertain. The party will select a new leader on September 23.

The Thai cabinet greenlit an expenditure of 3.48 trillion baht for fiscal 2024, which includes a budget deficit of 693 billion baht, 14% higher than the 593 billion projected in the approved fiscal 2024 budget by the Prayut Chan-o-cha government, causing economic worries.

In the retail sector, Central Food Wholesales, a division of Central Retail Corporation (CRC), plans to allocate roughly 20 billion baht to expand its GO Wholesale store network over the next five years to compete with the Makro chain.

Looking ahead, the US will release the September housing index on Monday, and the EU will report August inflation on Tuesday. The People’s Bank of China will update its prime lending rate on Wednesday. The Federal Reserve will meet on Tuesday and Wednesday, with a policy announcement expected around 2am Thursday Thailand time. The Bank of Japan will meet on September 21-22.

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