Thai stocks pulled lower last week before rebounding midweek. Shares of Delta Electronics rose after its weighting was raised in the influential MSCI Thailand Index, easing concerns about the impact of revised free-float requirements. After that, the SET corrected slightly.However, the main issue was earnings announcements, which were not met with the normally expected market behaviour. Stocks of companies with decent profits were being sold even without prior speculation, such as TFG, KCE and GULF. Some others saw gains for just one day before pulling back sharply, such as TIDLOR, ITC and THCOM.
Investors should remain cautious about refinery and petrochemical businesses, even though prices have not consolidated much yet, as post-war trading themes will shift and their influences on the market have faded.
This week, the main issues are likely to be the Middle East war, as peace negotiations and attempts to reopen the Strait of Hormuz remain stalled. Any violence could affect market consolidation, though this time around it is more likely to be triggered by inflation worries.
Signs are emerging of market expectations that the US Federal Reserve might not just hold interest rates but raise them in 2027 should price pressure escalate beyond expectations. Year-on-year inflation in April was 3.8%, beating market expectations of 3.7%.
