Thailand’s SET Index Down 16pts on Concerns over Faster Rate Hikes after Fed Powell’s Remarks

Thailand’s benchmark index, the SET, fell more than 10 points in early Wednesday trade, following other Asian markets, as regional equities were battered by hawkish comments from Fed Chair Jerome Powell overnight.

The SET Index fell 16.47 points, or 1.02%, to 1,602.04 as of 10.35 a.m. (Thai time), led down by a broad selloff in big-cap stocks, such as SCB, BBL, KBANK, and SCC. Volume was 4,411 million shares worth THB15 billion.

Federal Reserve Chair Jerome Powell told Congress on the first day of his semi-annual, two-day monetary policy testimony that the central bank will likely need to hike interest rates more than planned in reaction to recent strong economic data.

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in remarks to the Senate Banking, Housing and Urban Affairs Committee Tuesday morning. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”

These remarks suggested that the Fed may consider a rate hike of more than 25 basis points at its upcoming March 21-22 policy meeting.

According to Morgan Stanley, the Fed also hinted at a return to a half-point rate hike at the March meeting of the central bank, though this would rely on the strength of incoming economic data.

Following sharp losses on Wall Street and other regional bourses, RHB Securities (Thailand) said that the Thai stock index is now hovering just above the 1,600-point threshold. Currently, 1,600 points serve as support; however, if the market maintains its downward trend, the next support level is placed at 1,590 points, while 1,615 points serve as resistance.