Recap: Asian and European stocks rallied after a record-breaking run on Wall Street, propelled by American hiring data that bolstered confidence in the global economy. Japan's Nikkei ended Friday above 20,000 for the first time since December 2015. Oil headed for a three-week low, however, capping gains on the energy-heavy Thai stock market.
The SET index moved in a range of 1,558.22 and 1,568.57 points before closing at 1,567.60, down 0.1% from the previous week, in moderate turnover averaging 38.5 billion baht a day. Foreign investors were net buyers of 4.93 billion baht, institutional investors bought 1.9 billion, and brokers bought 557 million. Retail investors were net sellers of 7.4 billion baht.
Big movers: AOT led in turnover, added 5.3% to 44.50 baht, IVL fell 2% to 37.25 baht, and BANPU lost 3.9% to 17.30 baht. SUPER, led in volume, dropped 4.2% to 1.61 baht. Top gainer UBIS surged 39.3% to 8.50 baht and top loser DRACO sank 16.8% to 4.16 baht.
Newsmakers: US consumer spending rose by the most in four months in April and inflation rebounded, pointing to firming domestic demand that would allow the Federal Reserve to raise interest rates this month.
China's manufacturing and services sectors expanded at a solid pace in May thanks to robust construction and infrastructure investment. The official manufacturing Purchasing Managers' Index (PMI) was 51.2 in May, unchanged from April.
The Bank of Thailand is still closely monitoring offshore inflows after the baht appreciated to just shy of 34 to the US dollar. The central bank will also hold steady on its tapering measures for short-dated bonds next month.
Central bank governor Veerathai Santiprabhob said he saw no signs of dramatic growth in borrowing for property speculation, while banks have been better at managing risks associated with project financing.
The Consumer Price Index, based on 422 products and services, edged down 0.04% year-on-year in May, the first decline in 14 months, as prices of fresh fruits and oil fell. The dip followed headline inflation of 0.38% in April, 0.76% in March, 1.44% in February and 1.55% in January.
The Board of Investment approved special privileges for two investment categories. Investors in digital backbone infrastructure, such as fibre-optic and submarine cables, will be eligible for an eight-year tax exemption, up from five years. Also being promoted is automotive and electrical parts design, but details of the perks are still being discussed.
The manufacturing production index (MPI) in April dropped 1.7% year-on-year to 100.07, mainly due to lower exports in the auto sector. The average four-month MPI fell by 0.1% to 111.94, the lowest in 24 months.
Thailand's world competitiveness ranking has inched up by one spot to 27th, according to the IMD World Competitiveness Center. It cited better economic performance and improvements in the adaptability of the government, central bank policy, and effectiveness of government decisions.
The cabinet approved a proposal to place two expressways as underlying assets for the Thailand Future Fund (TFF), with a filing with the Securities and Exchange Commission (SEC) expected by the third quarter.
Ministers approved the selection of a private company and draft public-private partnership agreement for the MRT Pink Line (Khae Rai-Min Buri) and MRT Yellow Line (Lat Phrao-Samrong) of the Mass Rapid Transit Authority of Thailand (MRTA). Both will be monorails. The winner, BSR Joint Venture (BSR JV), consists of BTS Group Holdings Plc (BTS), Ratchaburi Electricity Generating Holding Plc (RATCH) and Sino-Thai Engineering and Construction Plc.
The NBTC said that 120 million of the 170 million mobile numbers it has allocated have been used, with 70% under 3G technology, 25% under 4G and 5% under 2G. It expects 2G services to be discontinued soon.
The National Economic and Social Development Board (NESDB) and the Fiscal Policy Office (FPO) expect economic growth in the second quarter to continue from 3.3% last quarter. The more positive view reflects the momentum that continued into April, thanks to improving exports and private consumption, and robust growth of foreign tourist arrivals.
The FPO is drafting a bill that would impose a windfall tax on landlords who benefit from the increased value of land from infrastructure developments. The ceiling for the tax rate is at 5% of the inflated value. However, the owner will not be liable unless ownership is transferred.
The NESDB said the unemployment rate in the first quarter increased to 1.2% or around 400,000 people, from 0.97% in the same period last year and 1% in the final quarter of 2016. The increase reflected greater automation in the farm sector and a drought. In addition, it said jobs have been lost in the export sector, which is still in recovery mode, as well as construction.
PTT Plc and its subsidiaries are revising their five-year capital expenditure and investment plans to take into account the advent of the Eastern Economic Corridor (EEC), where the group is keen to invest.
PTT Exploration and Production Plc (PTTEP) plans to co-develop oil and gas resources with Malaysia's national oil and gas company, Petroliam Nasional Berhad (Petronas) to increase output.
Coming up this week: The Bank of Thailand plans a briefing today on foreign-exchange regulation reform.
Revised first-quarter GDP figures for the euro zone will be released on Wednesday.
Due on Thursday are Chinese trade figures for May and Japanese Q1 GDP. The European Central Bank will meet, and Britain will stage an election that the Conservatives are expected to win, but the margin will be closely watched.
China will release May inflation data on Friday.
Stocks to watch: Tisco Securities' picks in June include BJC, BPP, CENTEL, CK, ROJNA and TPIPP. The broker also recommends stocks that will benefit from the Eastern Economic Corridor (EEC) -- AMATA, ATP30, EASTW, ESTAR, ROJNA, TICON and WHA, and construction stocks that will benefit from state investment -- CK, STEC, UNIQ and SEAFCO.
Asia Wealth Securities said contracting partners BTS, STEC and RATCH would benefit from construction of the MRT and Yellow monorail lines. BLAND could also benefit by virtue of its holdings in BTS.
Technical view: DBS Vickers sees support at 1,530 with resistance at 1,580 points. Thanachart Securities tips support at 1,541 and resistance at 1,575 points.