RECAP: Asian stocks declined yesterday for a third day following falls on Wall Street as tensions escalated in the Middle East, driving gold and oil to further advances.
Thai shares moved in a range of 1,397.80 and 1,446.26 points this week, before closing yesterday at 1,399.35, down 3.5% from the previous week, with daily turnover averaging 49.51 billion baht.
Retail investors were net buyers of 4.1 billion baht. Foreign investors were net sellers of 2.84 billion, followed by brokers at 1.07 billion and institutional investors at 196.52 million baht.
NEWSMAKERS: Chairman Jerome Powell said the US Federal Reserve is inclined to hold interest rates steady again at its Oct 31-Nov 1 meeting, while leaving open the possibility of a future hike if policymakers see further signs of resilient economic growth.
- The prospect of no rate cuts any time soon from the Fed has driven 10-year US Treasury yields to almost 5%, the most in 16 years, while undermining equities.
- US initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 198,000 for the week ended Oct 14, the lowest since January, indicating that the labour market remains tight.
- The US has sanctioned for the first time a company that transported Russian oil priced above the G7 cap of $60 per barrel, in an attempt to close a loophole in an earlier measure designed to punish Russia for attacking Ukraine.
- The US Commerce Department has further tightened export controls to keep China from acquiring advanced computer chips that it could use to help develop hypersonic missiles and artificial intelligence.
- Washington temporarily lifted sanctions on exports of oil, gas and gold from Venezuela, believing that the country is moving towards a transparent election next year.
- US crude oil inventories in the week to Oct 12 fell by 4.5 million barrels, a sharper decline than expected, while gasoline inventories declined by 2.4 million barrels.
- US retail sales grew 3.8% year-on-year in September, the strongest annual gain since February.
- Japanese consumer inflation grew 2.8% year-on-year in September, the lowest in 13 months. Government subsidies for electricity and fuel, which were rolled out earlier this year, helped slow price increases overall.
- Toyota Motor has signed an agreement to adopt Tesla's electric-vehicle charging technology from 2025. Ford, General Motors and Nissan have also adopted the US EV maker's North American Charging Standard, bringing it closer to becoming the industry standard.
- Toyota and Idemitsu Kosan have teamed up to develop and mass-produce all-solid-state batteries for EVs. Toyota said earlier it would introduce high-performance batteries to improve driving range and reduce costs of future EVs.
- Honda Motor announced plans for a joint venture with GM and Cruise to begin a driverless ride service in Japan in early 2026.
- Japanese exports hit a record ¥9.2 trillion ($61 billion) in September, climbing for the first time in three months as automakers revved up shipments to the US and Europe, unshackled from a global chip shortage that had held them back a year earlier.
- China's economy grew by more than expected in the third quarter, expanding 4.9% year-on-year, following 6.3% growth in the previous quarter. Among the main drivers were retail sales, which topped forecasts with 5.5% growth in September.
- China has instructed state-owned banks to roll over existing local government debt with longer-term loans at lower interest rates, as part of Beijing's efforts to reduce local debt risks in a faltering economy.
- Chinese new home prices fell 0.2% month-on-month in September, the third straight month, dashing hopes of a turnaround in demand during a traditionally peak buying period despite efforts to revive the crisis-hit property sector.
- The Chinese property giant Country Garden denied on Thursday that its founder and chairwoman had fled the country, as the heavily indebted developer flirts with a default.
- Gold prices approached a three-month high at $1,978 an ounce yesterday, as concerns over geopolitical tensions in the Middle East continue to drive investors towards safe-haven assets.
- Oil advanced yesterday as geopolitical tensions ratcheted higher, with prices poised for a second straight weekly gain. The global benchmark Brent topped $93 a barrel.
- The price of gas in the EU has fallen by 10% from an 8-month high as early winter in most of Europe is forecast to be less cold, which may lessen gas demand.
- The global smartphone market contracted by 8% in the third quarter to a 10-year low due to weak demand for leading brands Apple and Samsung in developed markets, according to Counterpoint Research.
- President Xi Jinping has announced plans by China to inject over $100 billion of new funding into its Belt and Road initiative.
- X, the social network formerly known as Twitter, has begun testing a $1-per-year subscription fee for new accounts that want to post or interact with other users, saying the measure has the potential to reduce spam and bot accounts.
- Prime Minister Srettha Thavisin, speaking at the signing of a tourism cooperation agreement with China in Beijing, proposed making the visa waiver permanent for Chinese tourists, The current trial is scheduled to expire on Feb 29.
- The Tourism Authority of Thailand (TAT) expressed hope that visa-free entry for visitors from Taiwan and India could begin soon, along with the elimination of immigration forms for Malaysians entering via the Sadao checkpoint.
- The cabinet approved the extension of visa-free entry for Russian tourists from 30 to 90 days, effective from Nov 1 to April 30 next year. The TAT forecasts that 1.6 million Russian tourists will enter Thailand next year.
- The Ministry of Finance plans to cut petrol taxes, saying it is ready to cooperate with the government to cut prices to ease the cost of living.
- Deputy Finance Minister Julapun Amornvivat said the introduction of the 10,000-baht digital wallet would be delayed from Feb 1 because creating a secure system will take more time, However, he insisted it would start no later than March 31.
- PTT has teamed up with Metron Asia Pacific, a France-based technology firm, to venture into the energy management business to help factories better control their carbon footprint and energy costs.
- The Federation of Thai Industries (FTI) said that if the Middle East war spreads, automobile exports will be affected around the end of the year as cars are the primary product exported to Israel, while the Middle East accounts for 16% of all vehicle exports.
- The Energy Regulatory Commission is preparing to appeal a Central Administrative Court decision to suspend the government's plan to buy 1,500 megawatts of wind power, due to alleged irregularities in the process of selecting power plants. The Ministry of Energy says a delay would affect the funds invested and electricity prices.
- Prime Minister Srettha Thavisin has ordered state agencies to buy electric vehicles to replace older vehicles, build more charging stations nationwide and make insurance for EVs more affordable.
- Government revenue in the first 11 months of fiscal 2023 exceeded the target by 6.9%, or 153 billion baht, to reach 2.36 trillion baht net, achieving a treasury balance of 300 billion baht at the end of August, the Fiscal Policy Office said.
COMING UP: The EU and the US on Tuesday will release updated manufacturing and services purchasing managers' index (PMI) figures. On Wednesday, the US will release September new home sales and weekly oil inventory data.
Locally, the Ministry of Commerce will release September trade figures on Wednesday. The Fiscal Policy Office will release an update on fiscal and economic conditions, the future confidence index and regional economic outlook.
STOCKS TO WATCH: InnovestX Securities recommends undervalued stocks with strong fundamentals and inexpensive valuations, including CPALL, TOP, CPN, BDMS and MINT. Stocks with strong and continuous earnings growth, and whose prices have beaten market forecasts since the beginning of the year include AMATA, BBL, KTB, BCH and KLINIQ.
- Kasikorn Securities says oil stocks will benefit from higher global prices, both upstream firms such as PTTEP and refineries such as TOP, BCP and SPRC.
- Higher oil prices may also lead to government intervention to keep retail diesel prices below 30 baht per litre. That may affect the asset quality of some loan providers. Stocks likely to feel the impact include THANI, ASK, SINGER and MICRO.
- Other stocks expected to be negatively affected as the government moves to help cut consumers' living costs include airlines (AAV and BA), transport groups (RCL and KEX) and retail oil operators (OR and PTG).
TECHNICAL VIEW: ASL Securities sees support at 1,390 points and resistance at 1,425. Yuanta Securities sees support at 1,390 and resistance at 1,430.
