Thailand’s SET Index closed at 1,296.59 points, decreased 9.97 points or 0.76% with a trading value of 40.64 billion baht. The analyst stated that the Thai stock market extended losses, hitting the lowest point in four years of 1,288 points, as it was pressured by the selloff of big-cap stocks.
The fund flow from foreign investors declined following concerns over the potential downfall of the Thai economy and political uncertainties. Moreover, the government could potentially need to take more loans, leading to chances for a credit rating downgrade.
Meanwhile, political turmoil from France also played a role in the market, causing the fund flow to move back to the US markets and strengthen the US dollar.
The analyst expected the market to potentially receive a technical rebound.
China’s central bank, the People’s Bank of China (PBOC), maintained the interest rate on one-year medium-term lending facility (MLF) loans at 2.50%, as expected on Monday.
The PBOC rolled over 182 billion yuan ($25.08 billion) in maturing loans to financial institutions, with 97% of analysts in a Reuters poll anticipating this decision.
As 237 billion yuan worth of MLF loans were due to mature in the same month, the PBOC’s actions resulted in a net withdrawal of 55 billion yuan from the banking system.
Additionally, the central bank injected 4 billion yuan through seven-day reverse repos at an unchanged borrowing cost of 1.80%, according to an online statement.
China exceeded expectations in its retail sales for May, with a 3.7% increase compared to the same period last year, surpassing the 3% rise predicted by a Reuters poll. On the flip side, industrial output and fixed asset investment figures failed to meet forecasts.
While industrial output saw a year-on-year growth of 5.6%, falling short of the projected 6% increase, fixed asset investment recorded a 4% rise from last May, slightly below the 4.2% forecasted by Reuters.
Following President Emmanuel Macron’s surprise call for a snap election in France, traders reacted by pulling back risk, causing French shares to shed approximately $210 billion in value last week, plunging over 6%. It was the biggest weekly decline since March 2022.
The turmoil primarily impacted French bonds, with the spread between French 10-year debt and German counterparts widening significantly.
A coalition of 173 American trade associations operating under the “American For Free Trade” banner has urged the Biden administration to extend the public comment period by an extra month, effectively pushing back the scheduled initiation of steeper tariffs on Chinese imports of electric vehicles, batteries, solar products, and other goods from August 1st.
In a letter addressed to the U.S. Trade Representative’s Office, the group argued that extending the public comment period until July 28th would be in the public’s interest.
This development came after another policy group spearheaded by the United Steelworkers union and domestic manufacturing companies advocated for even more stringent trade barriers on Chinese imports.
Deputy Finance Minister Julapun Amornvivat addressed the recent downturn in Thailand’s stock market which has dropped to levels last seen in November 2020, attributing it to political uncertainties.
He expressed confidence that this situation is likely to be temporary, emphasizing the importance of investor confidence. Amornvivat noted that several significant political factors are at play, contributing to the market’s current state.
Amornvivat remains optimistic that the political landscape will improve in the coming days. He also mentioned that the finance ministry is actively developing new mechanisms to enhance investor confidence amid the current circumstances.
