Thai stocks fall 1.3% amid fears of high interest rates impact

Share prices experienced a surge on Friday, reversing earlier downtrends and Wall Street’s sell-off, as traders weighed the implications of further interest rate hikes by central banks grappling with inflationary pressures.

Thai stocks fluctuated between 1,503.23 and 1,539.40 points before ending yesterday at 1,522.59, marking a 1.3% fall from the previous week, with daily transactions averaging 52.06 billion baht.

Retail investors led the pack as the primary net purchasers with an investment of 6.63 billion baht, trailed by brokers at 885.13 million. Conversely, foreign investors and institutions featured as net sellers, offloading 5.3 billion baht and 2.22 billion baht respectively.

In noteworthy developments, Jerome Powell, the chairman of the US Federal Reserve, expressed confidence on Wednesday that the Fed’s assertive interest rate hikes will not plunge the economy into a recession, acknowledging that the central bank cannot control all variables.

Looking ahead to next week, Monday will see the US releasing data on August’s economic activity and September’s manufacturing production. Tuesday is set to reveal US home sale prices for July, new home sales for August, and an updated consumer confidence index. Wednesday will bring reports on China’s industrial profits for August and the US’s weekly oil stock figures.

Kasikorn Securities has flagged a number of companies for investors to watch, warning that extended periods of high interest rates could inflate interest costs and potentially impact profits in 2024. These include: MICRO, TRUE, ANAN, BTS, ASK, CPF, BGRIM, BAM, BAFS, THANI, PTTGC, FPT, AEONTS, BCPG, BJC, MTC, SHR, CK, and GPSC.

In terms of technical perspectives, InnovestX Securities anticipates support at 1,490 points and resistance at 1,540, whereas Kasikorn Securities forecasts support at 1,500 and resistance at 1,570, Bangkok Post reported.

In related news, in the first five months of this year, foreign investors offloaded almost 100 billion baht worth of Thai shares, with 33.4 billion baht sold in May alone, due to increasing global interest rates and uncertainties surrounding the formation of a new government. Despite this, the Stock Exchange of Thailand expressed optimism yesterday, believing that the recent easing of the US debt ceiling could improve global sentiment and lead to increased investment in Thai stocks, supported by a rebounding Thai economy, Read more about this new HERE.

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