Thailand’s SET Index closed at 1,311.78 points, decreased 4.91 points or 0.37% with a trading value of 38.26 billion baht. The analyst stated that the Thai stock market traded narrowly and decreased at the end of the trading session, as it was pressured by the selloff of big-cap stocks, including CPALL, PTT, and PTTEP. The support from an increase in bank stocks following BOT’s decision to hold rates, Fed’s high-level rates projection, and the dot plot outlook which expected one rate cut this year, was not enough to bear the decline. As investors adopted a more cautious approach and awaited political developments in the country the following week, the trading volume remained low.
The analyst expected the market to trade sideways tomorrow.
The Federal Reserve decided to maintain the current interest rates within the range of 5.25% to 5.5% but adjusted its projection for rate cuts to only one in 2024.
Policymakers at the central bank acknowledged that there has been some progress towards achieving the 2% inflation target. During a press conference, Federal Reserve Chair Jerome Powell stated that the central bank is not yet fully convinced about the need to reduce rates, despite a decline in inflation levels from their previous highs.
The International Energy Agency (IEA) issued a forecast on Wednesday indicating that a rise in oil production led by the United States is expected to exceed the growth in demand globally from now until the end of the decade.
This imbalance is projected to result in unprecedented levels of spare capacity and could potentially disrupt the market management efforts of OPEC+.
In advanced economies, the IEA expects oil demand to fall below 43 million barrels per day by 2030, a decrease from almost 46 million barrels per day in the previous year.
The European Union (EU) announced on Wednesday its decision to levy increased tariffs on Chinese electric vehicle (EV) imports, citing the unfair subsidies that are heavily benefiting the Chinese EV sector.
Uncooperative Chinese BEV producers will face a 38.1% tariff, while compliant manufacturers will be subject to a 21% duty. Individual tariffs have also been disclosed, with rates varying based on the level of cooperation during the investigation. Prominent Chinese EV producers such as BYD, Geely, and SAIC are among those impacted by the tariffs, with Tesla’s case still under examination for a potentially lower duty rate.
Finance Minister Pichai Chunhavajira has addressed investor apprehensions regarding the recent slump of the Thai stock market to its lowest point in four years, which pointed out that the lack of government stimulus measures may have contributed to this decline.
The minister assured that the Finance Ministry has plans in place to provide support, which are currently being fast-tracked. The downward trajectory of the Thai market was in line with global circumstances, especially uncertainties in the European election, as investors bear no confidence. Nevertheless, Pichai expressed confidence that investor sentiment would improve once the global situation became more stable.
Thai consumer confidence reached its lowest point in seven months in May, marking a third consecutive monthly decline as worries about a sluggish economic rebound and political instability persist, as shown by a recent survey.
The consumer index dropped to 60.5 in May from 62.1 in April, reflecting the prevalent concerns among consumers. The upcoming politically charged cases scheduled to be heard by Thai courts next week, including one that could potentially lead to the removal of the prime minister, have heightened apprehensions about further government turmoil in the nation.
Thai Prime Minister Srettha Thavisin indicated on Thursday that an upcoming review of Thailand’s inflation target range by the central bank and finance ministry could enhance the likelihood of a rate cut.
Despite calls from the government to lower borrowing costs to stimulate the country’s economy, the central bank maintained its key interest rate for the fourth consecutive meeting on Wednesday.
As of now, no specific date has been set for the deliberations regarding the impending review of the inflation target, which will involve discussions between the Bank of Thailand and the Finance Ministry.
