Asian markets cool after rally fed by trade truce

RECAP: Asian markets limped into the weekend as investors consolidated gains after a week-long rally spurred by a truce in the China-US trade war.

Thailand, however, is the sole Asian market with foreign net selling, at 3.65 billion baht for the month to date, as escalating political tension triggers fund outflows.

The SET index moved in a range of 1,190.21 and 1,231.02 points this week, before closing yesterday at 1,195.77, down 1.3% from the previous week, with daily turnover averaging 41.65 billion baht.

Retail investors were net buyers of 5.88 billion baht. Foreign investors were net sellers of 3.21 billion baht, followed by institutional investors at 2.17 billion and brokerage firms at 500.12 million.

NEWSMAKERS: Federal Reserve chairman Jerome Powell warned of the possibility of "more persistent" supply shocks against a backdrop of uncertainty about trade and tariffs. Long-term interest rates are likely to rise due to economic changes, he said.

• The US said it would slash tariffs on small parcels from China worth less than $100 from 120% to 54%, and possibly to 30% later, after Washington and Beijing agreed on a 90-day pause in their trade war. The move eased major concerns at giant Chinese e-commerce platforms Shein and Temu.
• The value of Chinese exports in April rose 8.1% year-on-year, driven by exports to Asean which jumped by 20.8% as businesses sought to dodge high US tariffs.
• Gold prices fell below $3,200 an ounce on Wednesday as easing US-China trade tensions diminished the appeal of the safe-haven metal. Spot gold, which set a record at $3,500.05 on April 22, was on course for its worst week since last November.
• Japan's economy shrank for the first time in a year, with first-quarter GDP adjusted for inflation contracting by 0.7% year-on-year. That illustrates vulnerability even before the full impact of US tariff measures kicks in.
• US consumer price inflation eased to 2.3% in April, a tick below the 2.4% annualised figure recorded in March. It was the smallest 12-month increase since February 2021 and was slightly lower than forecasts.
• The People's Bank of China reported new loans in April at 280 billion yuan, significantly below expectations of 700 billion, as trade war pressures dampen demand.
• The EU accused TikTok of not being transparent about advertisements. If the findings are upheld, the Chinese-owned short-video platform may be fined as much as 6% of its worldwide annual sales.
• Honda Motor has forecast a 70% drop in net profit for the 2025-26 financial year as US trade tariffs weigh on the auto industry.
• Nissan posted a huge annual net loss of ¥671 billion ($4.5 billion) while confirming reports that it planned to cut 20,000 jobs worldwide.
• The Chinese EV battery maker Contemporary Amperex Technology Ltd (CATL) is expected to raise at least US$4 billion in its Hong Kong share listing, making it the world's biggest IPO of the year so far.
• Smartphone shipments to the US surged 30% in March as Apple, Samsung and Motorola rushed to bring in more devices in anticipation of steep import tariffs, Counterpoint Research said.
• Alibaba Group Holdings' quarterly revenue grew a disappointing 7% to 236.5 billion yuan ($32.8 billion) for the March quarter, versus an average estimate of 238 billion yuan.
• SoftBank Group's profit soared 124% in its fiscal fourth quarter to $3.5 billion. The company also reaffirmed plans to invest up to $30 billion in the ChatGPT owner OpenAI.
• Singapore Airlines will reward employees with a bonus equivalent to seven months' pay after delivering full-year net profit of US$2.1 billion that beat estimates.
• The Thai Finance Ministry plans to issue 5 billion baht worth G-Token digital tokens within two months, giving small investors a chance to buy government bonds in amounts as small as 100 baht.
• Thailand's economic growth may slow down over the next two years due to US tariffs, Finance Minister Pichai Chunhavajira said on Thursday, adding state-owned banks would provide up to 100 billion baht worth of financial support to exporters and businesses affected by the tariffs.
• Mr Pichai said Thai proposals to the US Trade Representative outline the country's willingness to import energy products, petrochemicals, aircraft, fruit and animal feed from the US to reduce its trade surplus.
• The finance minister ordered a special task force to be set up to provide information to the credit rating agencies S&P and Fitch before their visits later this year, addressing concerns after Moody's earlier downgraded Thailand's outlook.
• The Bank of Thailand has lowered expectations for more interest rate cuts to deal with a worsening growth outlook, with officials saying they need to preserve limited policy space to guard against future shocks stemming from a global trade war.
• The Consumer Confidence Index fell for the third straight month to 55.4 in April, its lowest in seven months due to concerns over the US tariffs, falling agricultural product prices, and political uncertainties, the University of Thai Chamber of Commerce said.
• PTT Exploration and Production (PTTEP) projects a compound annual growth rate of 2-3% from 2025 to 2034, with a production target of 716,000 barrels of oil equivalent per day, for annual growth rate of 11%.

COMING UP: On Monday, the euro zone releases April inflation and the People's Bank of China announces the loan prime rate. On Tuesday, the Reserve Bank of Australia holds a rate meeting and Japan announces April trade data. On Wednesday the UK releases April inflation. On Thursday, the US reports initial jobless claims and existing home sales. On Friday, Germany announces first-quarter GDP. Locally, the National Economic and Social Development Council reports Thai first-quarter GDP on Monday.

STOCKS TO WATCH: Kingsford Securities expects the SET to move sideways with limited downside next week, awaiting progress in US-Thai trade negotiations, and the release of Thai first-quarter GDP, with a market consensus of 3% year-on-year growth. The brokerage recommends gradually accumulating stocks with earnings momentum, including CPF, GFPT, TFG and BTG in the food sector; GPSC, BGRIM, CKP and BCPG in power generation; and DELTA, GULF, ADVANC and TRUE for infrastructure and data centres.

• InnovestX Securities sees long-term US interest rates trending higher, citing changes in the economic landscape, while domestic political uncertainty weighs on government stability. It recommends MINT at a fundamental target price of 31 baht a share, BJC at 28.50 baht, and CBG at 80 baht.

TECHNICAL VIEW: Kingsford Securities sees support at 1,182 points and resistance at 1,220. InnovestX Securities sees support at 1,170 and resistance at 1,230.