The Thai stock market rose 1.43% to close at 1,667.92 points on Wednesday, in line with global markets, as inflation worries eased following reports of a lower than expected US producer price index (PPI), falling crude oil prices and progress in peace talks between Russia and Ukraine.
The Nikkei 225 opened at 25,574.90 points, up 228.42 points or 0.9%, while the Hang Seng Index opened at 18,956.02, up 540.94 points or 2.94%, and the SSE Composite Index opened at 3,107.67 points, up 43.71 points or 1.43%.
However, analysts expect limited upside for stocks in the short term as investors still need to wait for the results of the Federal Reserve's rate-setting committee meeting, in which it is expected to announce the first interest rate hike in three years, said Apichart Phubancherdkul, head of strategy research at Tisco Securities.
Kasikorn Asset Management (KAsset) said the Russian-Ukrainian conflict and interest rate hikes will affect investment in the short term, but the firm believes businesses with good compliance on environmental, social and governance (ESG) criteria will continue to see good growth prospects in the future. This is because consumer behaviour is gravitating towards sustainability, said the brokerage.
Navin Intharasombat, executive vice-president and chief investment officer at KAsset, expects the peace talks between Russia and Ukraine to be protracted, causing energy prices to remain high and continuing to hurt market sentiment for some time.
He said the Fed's prospective rate hike by 0.25 percentage points at this week's meeting as well as concerns over the war will slow economic growth.
Volatility triggered by uncertainties on how the conflict will progress has encouraged many investors to sell their risky assets such as stocks and slow down investment, said Mr Navin.
To diversify against risk, he recommends investing in funds that are less volatile and have long-term growth prospects, namely ESG funds and funds related to climate and global warming.
Globlex Securities said the investment outlook for the medium term remains negative as global economic growth slows from rising energy prices triggered by the geopolitical conflict.
In addition, the pandemic flare-up in China that propelled Beijing to reimpose a lockdown will also slow the country's economic recovery, said the securities firm.
The brokerage recommends investing in fundamental stocks with strong growth potential amid market volatility, including Kasikornbank, Bangkok Bank, Siam Commercial Bank, Energy Absolute, Gulf Energy Development, Advanced Info Service, True Corporation and Total Access Communication.
