Thai and global stock markets rallied following the United States Federal Reserve's decision to raise the interest rate by 0.25 percentage points on Thursday.
However, concerns over US inflation remain, causing gold prices to continue rising. The fourth round of peace talks between Russia and Ukraine reportedly failed to make progress, pressuring market sentiment in the short term.
The SET Index rose 0.83% to close at 1,681.76 points on Thursday in trade worth 97.8 billion baht.
Kobsak Pootrakool, senior executive vice-president at Bangkok Bank, said the interest rate will rise to 1.75-2.00% via six adjustments by the end of this year.
The rate will rise to 2.5% to 3.0% through three to four adjustments in 2023 before plateauing in 2024, said Mr Kobsak.
He said the Fed is expected to pull back liquidity through quantitative tightening measures at the next meeting on May 3 to 4.
Mr Kobsak said the Fed has taken a more hawkish stance on monetary policy, raising interest rates faster to reduce inflation to normal levels within a year.
After the Fed chairman's remarks, stock markets gradually recovered. The Dow Jones was up 680 points and global stock markets rallied on Thursday as investors welcomed the Fed's plan to gradually raise the rate over two years.
With appropriate policies, US inflation will drop to 2%, while the labour market will remain active and the economy will continue to grow, Mr Kobsak said.
However, the investment outlook for next year is still uncertain because of the Ukraine war, which is unlikely to resolve in the near term, he said. If the situation changes or more negative factors emerge, the Fed may decide to adjust its policy and dispense stronger measures to curb inflation, said Mr Kobsak.
An analyst at Finansia Syrus Securities said the US economy continues to grow and the Fed will begin shrinking its balance sheet at its next meeting. Investors responded positively and believe the US economy is strong enough, said the analyst.
However, the war is an overhanging factor if an agreement cannot be reached, keeping domestic investment attractive during this period, said the brokerage.
The analyst said the Thai government is preparing to relax Covid-19 control measures, especially in the entertainment and tourism sectors.
The easing of these measures will benefit domestic stocks in the banking, retail, property, food and beverage, and medical sectors, said the analyst.
Recommended stock picks from the brokerage are Bangkok Dusit Medical Services, CP ALL, Osotspa, Panjawattana Plastic and Thai Oil.
Domestic gold prices rose slightly on Thursday because of inflation concerns, hiking by 100 baht to 30,950 baht. The spot gold price moved in a range of US$1,897 to 1,943 an ounce.