Thai stock index jumps as gold hits record high amid Fed rate plans
In a striking turn for the Stock Exchange of Thailand (SET), the index surged for the third consecutive day, momentarily cracking the 1,200-point mark yesterday, as gold prices soared to record highs. This rally followed the Federal Reserve’s decision to maintain interest rates at 4.25-4.50%, as anticipated.
Rakpong Charoenpong, Senior Vice President at KGI Securities (Thailand), attributed the buoyant market sentiment to the Fed’s hint that interest rates might be cut more than expected. This, coupled with a stronger baht against the US dollar, led to a flurry of large-cap stock purchases.
The Federal Reserve’s dot plot chart indicated plans for two interest rate cuts of 0.25% each this year, as predicted three months earlier. Although the Fed lowered its GDP growth outlook, it forecasted higher inflation for 2025, observed ASL Securities.
The brokerage noted the Fed’s confidence in the economy positively impacted markets. However, investors were advised to keep an eye on Donald Trump’s trade tariff policy, effective April 2. As a major export market, the US’s reciprocal tariffs could affect Thailand, which is preparing to adjust its import tax structure and boost US product imports, including aircraft and soybeans.
Domestically, ASL reported sustained institutional investor activity through window dressing expected until the first quarter’s end. The SET faces short-term resistance at 1,200 points, with the next hurdle at 1,230 points.
Prospects of more Fed rate cuts propelled gold prices to an all-time high of US$3,051 (about 108,800 baht), with Hua Seng Heng predicting resistance at US$3,070 and support at US$3,020, Bangkok Post reported.
In dividend news, SET-listed companies paid out a collective 594 billion baht for 2024, with the energy sector leading, followed by banks. Despite an index drop to pandemic-era lows, companies show strong earnings, creating a ripe opportunity for investors seeking dividends, said the SET.
“Investing in dividend stocks isn’t just about chasing high yields, understanding fundamentals and timing is key.”
As 67.8% of firms remain profitable, dividend stocks continue to lure investors keen on passive income.
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