Thai stocks suffer sell-offs as fears of Fed rate hike resurface

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The Stock Exchange of Thailand (SET) index plunged over 25 points on Friday in line with oversea markets, as concerns about the Federal Reserve’s plans to raise interest rates to combat inflation return. 

In the morning session, the SET index was down 1.54 per cent from its prior closing to 1,617.94 points, the lowest level in nearly two months. 

After the Fed’s move to raise its policy rate by 50 basis points came out as widely expected on Wednesday, global equity markets showed some recovery before being pulled down over worries of the upcoming rate hikes. 

Overnight on Wall Street, the Dow Jones Industrial Average slipped over 1,000 points, or 3.12 per cent, while The S&P 500 fell by 3.56 per cent,

“Following a volatile session yesterday, when an early Fed-induced market rebound was followed by afternoon selling, the SET Index could extend losses on Friday,” said KGI securities analyst Rakpong Chaisuparakul. 

“Locally, tourism plays could still outperform but may be unable to buffer overall market pressure,” Rakpong noted.

Meanwhile, analysts at KTB Securities said that another factor that must be watched is the Covid-19 outbreak situation in China given Thailand’s economic reliance on China. 

“We see this as a negative, hence we have dropped China-based equities from our suggested portfolio today,” KTB analysts wrote in a note.

As of the morning session, the most-traded stock by value on the SET was Knight Club Capital Asset Management Plc (KCC) dropping 5.98 per cent. KCC debuted in the exchange on Thursday by rising 149 per cent from its initial public offering (IPO) price.

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