Volatile trade on the Stock Exchange of Thailand this week reflected investor reaction to news events, with the SET index moving in a range from 1,570 to 1,610 points.The index climbed early in the week to nearly 1,610 points, the highest in 2.5 years, as global equities responded to news of a US-Iran peace deal, which dragged energy prices down. Easing inflationary pressures and future interest rate trends pulled down US bond yields and drove up tech plays, leading gains in the US, Korean, Taiwanese and Thai bourses.
However, profit-taking later kicked in and pared gains. At midweek, the US Federal Reserve meeting sent a "hawkish hold" signal, implying that interest rates will likely remain at high levels, with a potential increase around the year-end. This factor triggered global stock consolidation, but the SET remained resilient with stock rotation supporting buying interest. Towards the end of the week, sentiment was bolstered by the signing of the US-Iran peace deal.
This next week, the SET index will likely continue to move sideways in a range of 1,550 or 1,570 to 1,620 points. Thai shares are starting to show more sustained upward momentum than their peers on many global bourses. We have detected a sector rotation pattern with modest selling in electronics counters and buying in commerce and finance plays.
