Kaohoon Morning Brief – 23 June 2023

1) FSS expects energy sector to pressure the market after oil prices drop 4% last night

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move in a sideways trend after plunging around 3% in the past three days. The support level remained at 1,500 points, while concerns over Fed and ECB rate hike continued to pressure the market. Meanwhile, the Bank of England just raised the rate more than expected yesterday.

The energy sector would drag the market down after crude oil prices dropped 4% last night. The analyst recommended investors to speculate and pick stocks with individual positive factors. Domestic plays remain the favourite for FSS.


2) BoE surprises with 50bps rate hikes

The Bank of England (BoE) on Thursday surprised the market with a 50 basis points interest rate hike, its 13th consecutive increase to tackle persistent inflation that remains at a higher level.

The Monetary Policy Committee voted 7-2 in favor of a half percentage point increase, taking the benchmark of the bank’s base rate to 5%, which is higher than what economists expected for a 25bps rate hike.


3) Japan’s inflation for May rose more than expected

Japan’s core consumer inflation rose more than expected in May, while prices that excluded fuel costs also increased at the fastest annual pace in 42 years, which would keep the Bank of Japan under pressure to step away from its stimulus.

The nationwide core consumer price index (CPI) for Japan which excludes fresh food but includes energy items increased 3.2% YoY in May, slowing down from 3.4% from a month earlier, but exceeding a forecast for 3.1% increase by the market.

This is the 14th month that Japan’s CPI remained above its 2% target.