Equities fall as Fed talks up rate hike

Recap: European and Asian stocks dropped yesterday after more Federal Reserve policymakers indicated that the US central bank will raise interest rates as soon as March and adopt more hawkish monetary policies to combat inflation.

The SET index moved in a range of 1,654.05 and 1,682.71 points this week before closing yesterday at 1,672.63, up 0.91% from the previous week, in daily turnover averaging 84.04 billion baht.

Foreign investors were net buyers of 5.28 billion baht and brokerage firms bought 3.36 billion baht. Retail investors were net sellers of 4.47 billion baht and institutional investors offloaded 4.16 billion baht worth of shares.

Newsmakers: Global growth will "decelerate markedly" this year, but the Omicron variant of Covid-19 could make the situation worse and exacerbate labour shortages and supply chain snarls, the World Bank warned on Tuesday.

• US Federal Reserve chairman Jerome Powell called high inflation a "severe threat" to a full economic recovery and said the central bank was preparing to raise interest rates because the economy no longer needed emergency support.
• US consumer prices surged 7.0% in December, the biggest year-on-year increase since June 1982 but in line with economists' forecasts.
• A US federal judge has ruled that a reworked antitrust case against Facebook can go ahead. The Federal Trade Commission accuses the company of holding a monopoly on social networking through its acquisitions of Instagram and WhatsApp.
• The used car market in the United States is seeing an unprecedented phenomenon: owners selling vehicles for as much or more than they paid for them. Post-pandemic travel and a shortage of new cars are fuelling sales.
• The US Supreme Court on Thursday blocked a Biden administration rule that would have required companies with 100 or more employees to either mandate Covid-19 vaccination or weekly testing.
• Citigroup has agreed to sell its consumer-banking businesses in Thailand, Indonesia, Malaysia and Vietnam to Singapore-based United Overseas Bank in a deal worth US$3.6 billion.
• China has begun a fresh push to convince consumers to try out the digital yuan. A new app has been released for use in 10 areas, including Shanghai and Beijing. As well, the WeChat messaging app, with 1 billion users, will support the central bank digital currency.
• Visa has joined its rival Mastercard in offering central banks a way to test retail applications for digital currencies. The payment provider will launch a pilot programme with ConsenSys, a blockchain company, after discussions with 30 central banks.
• A House of Lords economic panel says the Bank of England has failed to offer convincing reasons to support a digital currency, raising concerns about privacy and banking system stability.
• China has reopened a busy checkpoint on its border with Vietnam after a three-week closure over Covid concerns, which had left thousands of trucks stranded and drawn criticism from Hanoi.
• The Uniqlo operator Fast Retailing posted a record first-quarter profit on Thursday and kept its yearly forecast unchanged, even as business in the key market of mainland China was hit by virus restrictions.
• Cathay Pacific faces possible legal action over an Omicron outbreak in Hong Kong that began with airline employees, the city's leader said on Tuesday.
• The London Interbank Offered Rate (Libor), an interest rate benchmark that once underpinned $300 trillion in financial contracts but was undone by a market-rigging scandal revealed in 2008, officially went out of existence on Jan 1.
• Twitter co-founder Jack Dorsey said his digital payments firm Block is building "an open bitcoin mining system" to make it easier for everyone to get in on the action.
• The Joint Standing Committee on Commerce, Industry and Banking has maintained its GDP growth forecast at 3% to 4.5%, believing the government will not reimpose harsh lockdown measures.
• The economy will take a 0.3% hit from the Omicron variant, although it should be managed within the first half of 2022, Bank of Thailand governor Sethaput Suthiwartnarueput said on Tuesday.
• Mr Sethaput says the central bank is concerned about the impact of higher prices on living costs, but not in terms of overall price stability. The BoT believes headline inflation will remain under its target of 1.7% this year.
• Exports this year are expected to rise between 5% and 8%, boosted by strong global demand and a weaker baht, the Thai National Shippers' Council said.
• Japan wants to maintain Thailand as its key production base, agreeing on Thursday to move ahead with cooperation plans on green industry and advanced technological development.
• Thailand intends to negotiate with the Lao and Chinese governments for closer logistic and freight transport cooperation through the Laos-China high-speed railway, in the hope that it will boost fresh fruit exports.
• The government is considering a faster rollout of the fourth phase of the "Khon La Khrueng" co-payment subsidy scheme to stimulate consumer spending.
• Taiwan has warned that anyone bringing in pork or pork products from Thailand will be heavily fined after African swine fever (ASF) was confirmed in the kingdom.
• The Internal Trade Department says traders have agreed to freeze chicken prices for six months while steps are taken to solve the problem of soaring pork prices, which have pushed up demand for chicken as an alternative.
• Crocodile farms are also offering the reptile's meat as a cheaper alternative to pork, the price of which has now soared past 200 baht/kg.
• The liquefied petroleum gas (LPG) price cap will be extended for another two months to alleviate living costs, Kulit Sombatsiri, permanent secretary for energy, said on Tuesday.
• The new 300-baht tourism fee due to take effect in April is drawing mixed reactions from tourism operators as the recovery remains fragile.
• Taxing profits from cryptocurrency trading and an end to the tax waiver on share sales should help to expand the tax base and generate additional revenue for national development, says Finance Minister Arkhom Termpittayapaisith.
• SET-listed RS Group has introduced Popcoin, a smart marketing platform that uses blockchain technology to increase the market value of the company's content and entertainment businesses.

Coming up: China will release fourth-quarter GDP and December industrial production and fixed asset investment and unemployment data on Monday. The euro zone will release December consumer prices.

• The Bank of Japan will release its monetary policy statement and revised economic outlook on Tuesday. Britain will release November employment earnings and bonus data. Germany will release January economic sentiment. Britain and Germany will release December consumer prices on Wednesday and the US will release December building permits and housing starts.
• Australia will release December employment data on Thursday and the US will release December existing home sales. Britain will release December retail sales on Friday. Canada will release November retail sales and December new housing prices.

Stocks to watch: Capital Nomura Securities recommends investing in dividend stocks as payout season from March to May nears. Stocks expected to report good second-half 2021 results and pay out yields of at least 2.3% are TISCO, TTB, LH, KKP, BBL, MC, AP, SC, NER, SAT, BCP, TVO, ICHI and THANI. The brokerage also expects banks will report excellent profits for the fourth quarter of 2021. It likes SCB and TTB among banks and GULF, ICHI, KCE, BLA and IVL in other sectors.

• Krungsri Securities recommends stocks that will benefit from higher oil prices, including PTTEP, TOP, PTTGC, IVL and SPRC, and banks that will gain from higher interest rates, including BBL, TTB and KBANK.

Technical view: Thanachart Securities sees support at 1,662 points and resistance at 1,700. DBS Vickers Securities sees support at 1,640 and resistance at 1,700.