Major stock markets in Asia traded lower on Thursday after the Federal Reserve indicated that it plans to shrink the balance sheet by $95 billion a month.
As of 10:10 local time in Thailand, Nikkei dropped 2%, SSEC fell 0.35%, Hang Seng Index slipped 0.03%, ASX 200 dipped 0.52%, while IDX Composite rose 0.36%.
Thailand’s SET Index opened at 1,690.18 points, decreased 11 points or 0.65%.
Yesterday, The Federal Reserve plans to shrink the balance sheet by $95 billion a month, $60 billion in treasury securities and $35 billion in mortgage-backed securities, according to meeting minutes. In the meantime, there also were strong signals that an increase of 50bps interest rate is coming.
Mr. Suwat Sinsadok, Managing Director of FSS International Investment Advisory (FSSIA), through “Kaohoon Jor Talad Program” on April 7, 2022, stated that the stock markets in today’s session had negative performance due to the announcement of the U.S. Fed will shrink its balance sheet, resulting in a negative session in Wall Street.
However, Mr. Sinsadok pointed out that the move by the U.S. Fed officials each time will trigger a correction, but the actual economic situation in a longer term outlook was not as grim as it looked, and the damaging economy was mainly due to the sanction of the U.S.
As for the Thai stock market, Mr. Sinsadok noted that economists and brokers have downgraded Thai GDP in 2022 due to inflation and slower-than-expected recovery in the tourism industry. Thus, the MD expected stocks related to reopening will outperform next year.
