Market Watch: SET to be boosted by 1.9 trillion baht sentiment

The 1.9 trillion baht economic package should bring positive internal sentiment to the Stock Exchange of Thailand (SET) on Wednesday.

The third economic relief package was approved on Tuesday and accounts for 11 per cent of the GDP. It is the biggest that the government has launched since the coronavirus outbreak began in January. 

Most Asian bourses, however, were trading down on Wednesday morning, in keeping with the US shares. Down Jones, S&P 500 and Nasdaq have all gone down by 0.12, 0.16 and 0.33 per cent respectively at Tuesday’s closing. 

The slight drop in US shares came after an early gain on Tuesday, where Dow Jones had its third-biggest point gain on record. It then dropped as Wall Street assessed news on the outbreak.

Japan’s Nikkei 225 traded up by 0.25 per cent but Hong Kong’s Hang Seng traded down by 0.62 per cent on Wednesday morning. South Korea’s Kospi was also down by 0.14 per cent while Singapore’s Straits Times Index fell by 1.87 per cent as of Wednesday morning.

CGS-CIMB Securities (Thailand) expects the positive news from the Cabinet to support the SET, but there may still be some ‘selling for profit’ as US shares and other Asian indexes were in the red zone Tuesday night and Wednesday morning. 

The firm expects some turbulence as a result; however, the overall mood is still positive. This could allow the SET to stay above the 1200 point while testing the 1238 mark, leading by shares within the domestic plays group. The index closed at 1214.95 points on Tuesday, which was up 76.11 points or 6.68 per cent from Monday. 

Krungsri Securities sees the index in the range of 1200-1235 as the number of confirmed coronavirus cases and death toll in the US, Europe and Thailand are declining. Thailand registered 38 new cases on Tuesday as compared to around 100 per day last week.  

But oil pressure continues to persist as the US Energy Information Administration lowered West Texas Intermediate and Brent crude’s oil prices for 2020 to US$29.34 and $33.04, down 23 and 24 per cent respectively from its previous prediction in March.

The firm recommended shares with retail groups (CRC, HMPRO, and GLOBAL) and shares within the tourism and hotel sectors (AOT, CENTEL, MINT, and ERW), as the number of confirmed cases and death toll slow down. 

They also look to shares that receive minimal impact from the outbreak, including ICT (ADVANC, INTUCH, and DTAC), food (CPF), and defensive stock (TTW and BCPG) groups. 

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