The Stock Exchange of Thailand Index (SET) rebounded yesterday after declining by nearly 80 points, or 4.8%, over the previous three days, amid concerns over the Covid-19 Omicron variant and the US Federal Reserve's faster than expected tapering of quantitative easing (QE).
Since Nov 26, fears about Omicron cut the market's capitalisation by more than 939 billion baht, falling to 18.4 trillion baht as of Nov 30.
The MSCI World Index has fallen by 3.1% over the past three days.
According to SET data, stocks whose value slumped the most were either dependent on the domestic economy or sectors directly affected by the outbreak, such as transport (-8.5%), banking (-7.3%), tourism (-7.3%), construction (-6.9%), media (-6.2%) and property (-5.6%).
Sectors less affected by the virus have shown a positive performance, including personal finance (+3.6%), property funds and real estate investment trusts (+2.8%), health (+2.6%) and electronics (+1.4%).
The Fed is also considering cutting its QE at a faster pace -- from the previously announced $15 billion, to up to $30 billion -- because of rising US inflation as falling liquidity in the system affects market sentiment.
Asia Plus Securities recommends holding 25% to 35% in cash and rebalancing stocks from companies with businesses related to Covid-19, such as Sri Trang Gloves Thailand, Thai Union Group and Bangkok Chain Hospital.
Natapon Khamthakrue, vice-president of Yuanta Securities (Thailand), said the SET Index's support level in December is expected to be around 1,570-1,550 points with a resistance level of 1,650 points.
"We believe the Covid-19 variant outbreak will end in two months, just like with Delta," he said.
As for medium- to long-term investment, he recommends stocks that were devalued because of pandemic pressures.
Apichat Poobunjirdkul, senior strategist at Tisco Securities, said the SET Index would plummet to 1,500-1,520 points in the worst-case scenario. However, the monthly resistance in December is estimated at 1,600-1,610 points.
Tisco recommends stocks least affected by the pandemic for short-term investment strategies, such as communications, logistics and banking. For longer term investing, the tourism sector is recommended because it is expected to recover next year and stock prices are low.
The SET Index yesterday rose 1.41% to close at 1,590.81 points, with trade worth 93.9 billion baht.