Major stock markets in Asia traded lower on Friday amid rising concerns of U.S. inflation due to the energy crunch and the failed peace talks between Russia and Ukraine late yesterday.
As of 10:10 local time in Thailand on March 11, 2022, Nikkei fell 2.44%, SSEC dropped 1.62%, Hang Seng Index plunged 3.14%, ASX 200 decreased 0.90% and IDX Composite slipped 0.63%.
Thailand’s SET Index opened at 1,640.88 points, decreased 6.20 points or 0.38%.
The U.S. Consumer Price Index (CPI) rose 7.9% in February compared to last year, marking the fastest annual jump since 1982. The figure is higher than January’s 40-year higher rate of 4.5%. The main attribution behind surging inflation was a surge in energy prices.
The talks between Russia and Ukraine’s foreign ministers in Turkey on Thursday reportedly ended with no progress made on establishing a cease-fire or safe passage for civilians for fleeing the besieged city of Mariupol.
Moscow said it wants the demilitarization of Ukraine and the recognition of separatist territories as independent. It has periodically called for regime change in Kyiv. Meanwhile, Ukraine still insisted on not ceding any territory.
Asia Wealth Securities (AWS) stated that it expects the SET to fluctuate in a sideway to sideway down in a range of 1,635-1,665 points due to uncertainties in many factors, including (1) Ukraine-Russia situation that there are no further positive signs from the latest round of negotiations, (2) global commodity price volatility, particularly crude oil prices, and (3) rising U.S. inflation reporting and the possibility of further increases in the coming Machr. Before the 15-16 Mar Fed meeting, it added weight to the Fed’s rate hike by 0.5% (previously, the market had weighted the rate hike by only 0.25%), reflecting the US. bond yield 10 years and 2 years significantly increased.
For investment strategy, AWS gave weight to stocks with an interesting valuation which are bank stocks, real estate group, construction group and tourism groups, including KBANK, SCB, BBL, LH, QH, ORI, MINT, SHR and AOT. This includes defensive stocks that are mostly domestic play such as BH, BDMS, INTUCH, ADVANC, BEM, HMPRO, CPALL and MAKRO.
