SET Index Drops under 1,580 on Profit-Taking amid Inflation Fears

SET Index fell below the 1,580-point threshold after a fresh rebound in the morning session, as sentiment waned due to rate worries and the Thai baht touched a 6-year low.

Thailand’s SET Index began Tuesday’s afternoon session with a 15.66-point decline, falling to 1,577.88 points with a trading value of THB52,332 million.

Capital Nomura Securities stated that despite the SET index’s morning recovery, the market is still concerned about rising inflation. In addition, the baht fell to its lowest level in six years, causing profit-taking to continue into the afternoon session.

Stocks in Thailand also fell along with those in Europe on Thursday morning tradings as investors fretted over the future of the economy in the wake of recent monetary policy tightening by European central banks to combat rising 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. 

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.