UOB Asset Management (Thailand) (UOBAM) assessed that ongoing tensions in the Middle East remain a key factor driving volatility in the global financial markets. After Masoud Pezeshkian, President of Iran, adopted a more conciliatory stance by apologizing to neighboring countries affected by Iran’s actions, he also called for countries not to side with the United States and Israel in attacking Iran.
However, some militant groups have continued to attack oil refineries in the Israeli city of Haifa, while the Israeli Defense Forces (IDF) have struck oil storage facilities in Tehran. This has led to increased volatility in oil prices due to heightened risks to energy infrastructure.
Currently, global investment sentiment remains in risk-off mode, as seen from the CNN Fear & Greed Index dropping to 27, in the ‘Fear’ zone, reflecting investor concerns. This is despite several better-than-expected U.S. economic indicators, such as the ISM Purchasing Managers Index (PMI) for services and manufacturing, as well as improved retail sales figures. However, the labor market is showing signs of slowing, with February nonfarm payrolls turning negative and the unemployment rate rising, leading to ongoing pressure on U.S. stock markets due to worries over inflation and interest rate trends.
Globally, the European economy continues to face pressure from higher-than-expected inflation figures, even as unemployment and retail sales readings exceeded forecasts. Meanwhile, China’s economy is starting to show signs of rebalancing, targeting growth of 4.5-5% in 2026 and emphasizing stimulating domestic consumption and technology investment. The Thai stock market remains above 1,400 points, despite sell-offs during the risk-off period, and analysts still view index corrections between 1,250-1,300 points as buying opportunities.
In this volatile market environment, UOBAM recommends diversifying investments into various asset classes. The firm proposed global bond investments through the UGIS fund, which stands to benefit from possible interest rate cuts in the future, as well as global equities with an absolute return approach through the UGEAR (Adjusted Strategy) fund to cope with market volatility. In addition, for investors with higher risk tolerance, the UGSTAR and UGD funds are recommended for greater long-term return potential.
