The SET Index is anticipated to slip further into the red zone today after the US Federal Reserve hiked its benchmark interest rates by 75 basis points, the biggest since 1994, in an effort to curb inflation.
The Federal Reserve on Wednesday raised its benchmark interest rates by 75 basis points, marking its most aggressive hike since 1994.
“Clearly, today’s 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common,” Fed’s Chair Jerome Powell said.
“I think events of the last few months have raised the degree of difficulty, created great challenges,” he said. “And there’s a much bigger chance now that it will depend on factors that we don’t control.”
The chairman also added that it is still possible for the central bank to achieve a soft landing, meaning that the Fed will be able to bring down inflation without causing a recession.
Lastly, he noted that although he sees a 50-70 basis point increase in the meeting in July, decisions will be made meeting by meeting.
Prior to the Fed meeting, Thailand’s private securities firm Asia Plus Securities predicted that if the Fed raises rates by the expected 75 basis points, the SET Index would fall further to 1,580 points.
Therefore, during market volatility, ASPS recommends investing in 3 following themes;
1. Stocks benefiting from weak THB: Hana Microelectronics Pcl. (SET: HANA), Thai Union Group Pcl. (SET: TU), KCE Electronics Pcl. (SET: KCE) and Charoen Pokphand Foods Pcl. (SET: CPF)
2. Stocks benefiting from interest rate hike: Bangkok Bank Pcl. (SET: BBL), Kasikornbank Pcl. (SET: KBANK) and Bangkok Life Assurance Pcl. (SET: BLA)
3. Country’s reopening plays: Minor International Pcl. (SET: MINT), Central Plaza Hotel Pcl. (SET: CENTEL), Bangkok Expressway and Metro Pcl. (SET: BEM) and Central Retail Corporation Pcl. (SET: CRC).