Rate jitters keep stocks on back foot

Recap: Global stocks retreated as markets worried about more US interest-rate increases while Asian shares slumped on a concern that China's Zero-Covid policy may hold back the region's economic growth.

The SET index moved in a range of 1,617.94 and 1,668.54 points this week before closing yesterday at 1,629.58 points, down 2.27% from the previous week, in daily turnover averaging 72.39 billion baht for three operating days.

Retail investors were net buyers of 3.61 billion baht. Foreign investors were net sellers of 2.54 billion baht, brokerage firms sold 822.91 million baht and institutional investors offloaded 243.62 million baht worth of shares.

Newsmakers: The Federal Reserve made its biggest rate hike since 2000 with a half-percentage-point increase meant to crush soaring US inflation. Though widely expected, the news sent the Dow crashing 3% and the Nasdaq lost 5% on Thursday.

• The Biden administration is split on whether to pare back tariffs on imports from China in an effort to cut consumer costs and reduce inflation, as the White House gives renewed consideration to a step that has divided officials.
• China's strict zero-Covid policy has led to a plunge in confidence among European companies operating in the country as supply chains are tangled, revenue projections fall and staff leave, according to a business group survey released on Thursday.
• Chinese factory activity fell to the lowest level in more than two years in April, underscoring the economic damage caused by Covid outbreaks and lockdowns and escalating concerns about further disruption to global supply chains.
• A widespread selloff in China is rippling through emerging markets, threatening to snuff out growth and drag down everything from stocks to currencies and bonds.
• Elon Musk, who has agreed to take Twitter private in a $44-billion deal, has told prospective investors he could return the social-media company to public ownership after just a few years.
• Workers at an Amazon.com facility in New York have roundly voted against unionisation -- dealing a setback to a burgeoning organised labour movement one month after a landmark win at a nearby warehouse.
• Bitcoin tumbled the most since January as the rout in financial markets deepened in light of increasing concern of recession. The largest digital currency fell 11% to $35,611 on Wednesday.
• Oil prices headed for a weekly gain on signs the market is tightening as the European Union moved toward banning Russian crude and the US said it would refill its strategic reserves. West Texas Intermediate was up 4% on the week at $109 a barrel.
• India has evoked an emergency law in a bid to start generation at some idle power plants running on imported coal that are not producing power because of financial stress or high international prices of coal.
• World food prices eased slightly in April after hitting a record high in March, but global food security remained a concern because of difficult market conditions, the Food and Agriculture Organization said.
• Thailand's economy is expected to grow 3.5% this year, down from an earlier projection of 4.0%, Prime Minister Prayut Chan-o-cha said on Tuesday, noting how the Russia-Ukraine war could slow the economies of the country's trading partners.
• Thai inflation in May is expected to rise in lockstep with energy prices, which remain high compared with 2021, after the headline consumer price index increased 4.65% year-on-year in April, according to the Commerce Ministry.
• A proposal by labour advocacy groups to increase the daily minimum wage to 492 baht, from the current range of 313 to 336 baht, is drawing stiff opposition from businesses who fear a big rise in a volatile economy will hurt their prospects.
• Thailand is joining 53 member countries to propose that the World Trade Organization (WTO) address export bans on food and agricultural products, amid concerns about food shortages linked to the pandemic and the Russia-Ukraine war.
• The Bank for Agriculture and Agricultural Cooperatives (BAAC) has set aside 5 billion baht for loans to fruit exporters to deal with slowing shipments to some markets, said executive vice-president Pongphun Jongrak.
• Despite global uncertainties, Thai exports are expected to perform well in the second quarter, with year-on-year growth between 3.5% and 5%, according to the National Shippers Council.
• The cabinet on Tuesday approved measures to boost imports of animal feed for three months to ease a shortage following the disruption caused by the conflict in Ukraine.
• Investor confidence in the Thai stock market has slipped to a three-month low on concerns about Ukraine and US Federal Reserve tightening, a capital markets group said on Thursday.
• Analysts at JP Morgan downgraded Thailand's equities rating on Monday, citing the effect of inflation and China's Covid outbreak on the tourism recovery.
• Thai tourism remains on course to reach 20 million arrivals next year as the prime minister predicted, following the easing of travel rules on May 1, according to the Tourism Authority of Thailand (TAT).
• Foreigners with a work permit or border pass will be exempt from the 300-baht tourism fee, which is set to be collected starting in July.
• The Special Economic Zone Policy Committee has approved four new special economic corridors, meant to resemble the flagship Eastern Economic Corridor (EEC), in a move to spur the economy and decentralise income to the regions.
• The Joint Standing Committee on Commerce, Industry and Banking is calling full enforcement of the Personal Data Protection Act (PDPA) to be postponed from June 1, saying businesses are unprepared to comply, particularly SMEs still struggling to recover from the pandemic.
• Thai Beverage Plc shares jumped on Thursday after the company confirmed it would look to sell a 20% stake in its regional beer business through a Singapore listing, more than a year after it postponed the plan for a second time due to pandemic-led uncertainty.
• PTT Exploration and Production aims to increase production from the Erawan and Bongkot gas fields in the Gulf of Thailand to 1.5 billion cubic feet per day, from less than 600 million now, to reduce reliance on expensive LPG imports.
• The US oil and gas giant Exxon Mobil Corporation has scrapped its 330-billion-baht ethylene cracker and refinery expansion project in Chon Buri.

Coming up: Japan will release March household spending on Monday and National Australia Bank will release April business confidence. Germany will release May economic sentiment on Tuesday and China will release April consumer and producer prices. The US will release April core CPI and federal budget balance on Wednesday.

• Britain will release first-quarter business investment data on Thursday, Opec will issue its monthly oil industry report and the US will release April producer prices. Due Friday are March industrial production figures from the euro zone and the US export and import price index for April.

Stocks to watch: SCB Securities recommends allocating 50% of one's investment in stocks to those with good performance and limited impact from external factors, such as KBANK, AMATA, LH, GULF and ADVANC. It also urges investors to beware of speculative purchases of transport, automotive, building materials, power plants, real estate and packaging stocks, as their earnings are expected to drop because of the impact of higher energy costs.

• Capital Nomura Securities expects market sentiment to face pressure from rate increases around the world. DBS Vickers Securities suggests investing in defensive stocks or stocks whose prices have corrected and benefited from the weakening baht, such as hospital companies. The brokerage's picks from the group include BDMS, SAPPE, KCE, AU, ASIAN, GFPT and MEGA. It recommends PTTEP, TOP and BCP for upstream energy stocks and MAKRO for inflation-proof stocks.

Technical View: Capital Nomura Securities sees support at 1,610 points and resistance at 1,660. DBS Vickers Securities sees support at 1,620 points and resistance at 1,660.