Daily Strategy: AWS Expects Volatility in Markets before US Inflation Reports

Major stock markets in Asia traded in a mixed session as the announcement of the U.S. inflation data is right around the corner, despite a surge in Wall Street last night.


Thailand’s SET Index opened at 1,706.36 points, increased 3.20 points or 0.19%.

As of 10:15 local time in Thailand, Nikkei rose 0.07%, SSEC gained 0.02%, Hang Seng Index dipped 0.28%, ASX 200 increased 0.13% and IDX Composite advanced 0.49%.


Asia Wealth Securities (AWS) expected the SET today to move in a frame of 1,685-1,710 points. The SET rose better than expected from fund flows back into the emerging market, causing big cap stocks such as the SET50 and SET100 to increase 1.8% and 1.5% respectively and selling pressure in sSET and mai shares to fall 1.04% and 1.02% respectively.

However, AWS believed today’s trading will be volatile before the CPI report is announced by the U.S. Department of Labor, the Consumer Price Index (CPI) is scheduled today to be released for January results (known on the morning of 11 Feb). The CPI is a measure of inflation from consumer spending that the market consensus expects the CPI index to increase 7.2%YoY which is the highest level in 40 years.

For the investment strategy, AWS chose stocks that have a chance to increase from individual positive factors, including strong fundamentals and laggard share price. AWS continued to choose stocks in banking and insurance that benefit from rising interest rates, which are KBANK, BBL and BLA as top picks, and those that benefit from domestic purchasing power that we choose BEM, BEC, ONEE, BJC, CRC, CPALL, MAKRO, HMPRO and AWC.