Daily Strategy: KSS Expects SET Index to Extend Some Gains despite Lacking Internal Drivers

Major stock markets in Asia traded in a mixed session on Wednesday as Japan’s economy shrank in the first quarter of this year, while the U.S. Federal Reserve chair Jerome Powell said that the central bank will not hold back on a rate hike to bring inflation down.


As of 10:20 local time in Thailand on May 18, 2022, Nikkei rose 0.72%, SSEC fell 0.42%, Hang Seng Index dropped 0.62%, ASX 200 gained 0.95% and IDX Composite increased 1.04%.

Thailand’s SET Index opened at 1,618.01 points, increased 3.52 points or 0.22%.


Yesterday, the Federal Reserve chair Jerome Powell said that he will not hold back the attempt to increase interest rate until inflation falls back toward a healthy level. The market is now certain that there will be a 50bps rate hike coming in June and July.


Japan’s economy dropped 1% in the first quarter of 2022 compared to the same period last year, while dipping by 0.2% compared to the previous quarter, according to the government data shown early Wednesday. The annualized drop was less than the 1.8% contraction estimated by Reuters poll.


Mr. Chaiyot Jiwangkul, Assistant Director of Krungsri Securities (KSS), through “Kaohoon Jor Talad Program” on May 18, 2022, expected that the Thai stock market to continue rebounding in today’s session, still seeing some growth in the U.S. economy, despite Fed’s attempt to tamper inflation by raising interest rate.

However, he saw that the uptrends for the Thai stock markets will be temporary, saying that the market still lacks a positive factor to drive the market, while the gain earlier was due to a technical rebound. 

Mr. Jiwangkul expected the resistance level at 1,630 points for SET Index, while saying that it could be very difficult for the market to top 1,640 points without a catalyst.

In addition, Mr. Jiwangkul stated  that he expected foreign funds to continue flowing into Thai stocks, seeing positive trends up ahead as Covid-19 situation eased and tourists returned.