Market Watch: SET to fluctuate with various downs and rebounds

After a 7 per cent drop to 1046 on Monday, the Stock Exchange of Thailand (SET) is expected to be trading down further with technical rebounds through Tuesday, brokers said. 

Krungsri Securities expect the equity market to go down and test the 1020-1030 mark before the rebounds happen as investors, and people in general, are still panicked over the coronavirus outbreak.

The US Federal Reserve used another emergency rate cut on Sunday to bring its benchmark interest rate down to near zero and announced that it would buy US$700 billion in treasury and mortgage-backed securities. The central bank is trying to avoid a severe economic slowdown in the world’s largest economy. 

Following the news, the S&P 500 index fell by 12 per cent while the Dow Jones suffered its worst point drop in history, falling by 12.9 per cent on Monday. Apparently, the emergency interest rate cut did not sooth the market’s concerns that the US economy is much worse than it looks. 

The cabinet will have its meeting on Tuesday, with citizens and businesses currently looking for more support from the government. Krungsri Securities said investors are still preferring cash right now, but stimulus measures — both in country and abroad — could lead to the technical rebounds that are expected on the SET on Tuesday. 

Gold also took a hit on Monday as investors are selling the precious metal to keep cash as well. April gold futures were traded at US$1,495 an ounce on Monday. According to ANZ Bank’s estimates, gold prices are undervalued right now. They said that they see prices going up to US$2,000 by the second quarter of 2020, then leveling off to US$1,700 an ounce by the end of the year. Meanwhile, the baht was trading at 32.1 per greenback on Tuesday morning.


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