Market Roundup 6 July 2022

1) Thai stock market outlook

Thailand’s SET Index closed at 1,541.79 points, increased 0.49 points or 0.03% with a trading value of 72 billion baht. The analyst stated that the Thai stock market was fluctuating, dropping sharply in the morning, but bouncing back in the afternoon even though the market still lacked positive drivers as declining oil prices from yesterday pressured the market along with weakening Thai baht.

The analyst expected SET Index to move sideways in tomorrow’s session and recommended investors to monitor the U.S. PMI and Fed’s meeting.


2) China imposes “temporary restrictions” in Xian amid rising Covid cases

Businesses in China’s tourist city, Xi’an, were forced to shut their doors again as the number of new Covid-19 cases spiked, while Shanghai and Beijing have been ordered to conduct further rounds of mass covid testing.

Tens of millions of people were put on lockdown in China on Wednesday after health officials reported over 300 Covid cases in the country, with clusters discovered in the historic northern city of Xi’an and the country’s financial hub, Shanghai.

The new cases, as well as the official response to them, have fueled fears that China would return to strict restrictions that were seen earlier this year.


3) Citi sees bearish oil outlook at $60s if recession hits

“In a recession scenario with rising unemployment, household and corporate bankruptcies, commodities would chase a falling cost curve as costs deflate and margins turn negative to drive supply curtailments,” Citi’s strategist wrote in a note to clients.

“Like then, so today high energy prices preceded the events that triggered a recession. Brent crude oil breached $140/bbl in Jul’08, equivalent to over $160/bbl in real terms, only to fall to $40/bbl by year-end before re-balancing at $90/bbl deferred and remaining there for the next four years,” Citi pointed out.

Citi said that oil prices could go to $60s if recession hit.