Thailand’s SET Index dropped below the resistance level on Friday amid pressure from global central banks hinting for more rate hikes and domestic political issues that had been limiting an upside for the Thai bourse since the middle of March.
The main bourse for the Thai stock market, SET Index, fell 12.77points or 0.85% in the morning session on Friday to 1,496.54 points, breaking the crucial support level of 1,500 points given by analysts.
Central banks have made it very clear this week that inflation is still a problem. The U.S. Federal Reserve’s chairman Jerome Powell said that the FOMC broadly feels it will be suitable to raise rates again this year and perhaps two more times. The rate cut would not be happening anytime soon.
The United Kingdom raised rates by 50 bps yesterday, more than expected, for the 13th rate hike. Meanwhile, Switzerland increased its benchmark rates by 25 bps. Norway hiked rates by 50 bps, more than expected and also for the 11th hike. Turkey made a historic 650 bps rate hike to 15%.
Meanwhile, uncertainties for Thai political issues remain the biggest negative catalyst for the stock market, even after the approval of 500 MPs by the Election Committee. Foreign fund flows continued to seek other markets since the election in May.