The Stock Exchange of Thailand (SET) index rebounded strongly on Thursday as other regional bourses tracked gains on Wall Street after the Federal Reserve kept US interest rates unchanged at 5.25-5.50%.
The Federal Open Market Committee on Wednesday held the fed funds rate at a 22-year high, but kept open the possibility of further monetary tightening amid mounting evidence that the US economy remained strong.
Fed chair Jerome Powell had a positive view of the US economy, but commented that recent increases in bond yields have led to higher US financial stress. The statement suggested that policymakers struggled to determine whether financial conditions may be tight enough already to control inflation, or whether an economy that continues to outperform expectations may need still more restraint.
As the Fed kept interest rates unchanged for a second consecutive meeting, US markets rebounded from a dismal past three months on Wednesday with investors convinced the central bank would stay put for the rest of the year. The Nasdaq jumped 1.6%, while the S&P 500 climbed 1.1% and the Dow Jones Industrial Average gained 0.7%.
Bond yields retreated following the Fed's rate decision. The US 10-year yield sank as much as 19 basis points to less than 4.8%. The 2-year yield fell to a 2-month low below 5%.
In Asia, Japan's Nikkei index opened at 31,987.02 points, up 1.22%, and the Topix added 0.76%, hitting fresh three-week highs. Hong Kong's Hang Seng index rose 1.06%, while South Korea's Kospi gained 1.99%. In Australia, the S&P/ASX 200 rose 1.20%, edging close to its highest level in nearly two weeks.
The SET index on Thursday rose by nearly 2% to top 1,400 points as analysts expected.
Apichart Phubancherdkul, head of strategy research at Tisco Securities, said the outlook for the Thai bourse would fluctuate for the remainder of 2023 as it lacks catalysts from both inside and outside Thailand to pump up trading.
A delay in creating the 2024 fiscal budget and uncertainties surrounding the digital wallet policy are pressuring market sentiment, along with the likely escalation of the Israel-Hamas war, according to the brokerage.
Tisco expects the Thai index to have a support level of 1,320 points and resistance at 1,420 points this month. The brokerage recommends Airports of Thailand (AOT), Bangkok Dusit Medical Services (BDMS), CP Axtra (CPAXT), Major Cineplex Group (MAJOR) Don Muang Tollway (DMT), MC Group (MC) and Tipco Asphalt (TASCO).