SET Index Drops below 1,600 Level as Concerns over U.S. Rate Hike Pressure the Market

The Thai stock market plunged at the opening bell, dropping below the 1,600 resistance level as concerns over the U.S. rate hike continued to give a bitter taste to investors.

 

SET Index fell 14.58 points or 0.90% to 1,598.84 points at the open on June 21, 2021.

 

CGS-CIMB expected the Thai stock market to move in the same direction as Asian stock markets in concerns of the U.S. rate hike and lower bond yield that would result in investors selling risk assets for safer one such as bond yield.

In addition, the analyst recommended investors to monitor the Bank of Thailand (BOT) meeting for policy rate and GDP outlook that could be revised down due to the Covid-19 cases that remained high.

 

Last week, the U.S. Federal Reserve on Wednesday kept its benchmark interest rates unchanged at the record-low level of near zero, as the economic recovery continues amid growing concerns over inflation surge.

The U.S. central bank on Wednesday kept its benchmark interest rates unchanged at the record-low level of near zero, as the economic recovery continues amid growing concerns over inflation surge.

Fed’s Chairman Jerome Powell stated that the Fed raised GDP expectations for this year to 7% from 6.5% previously. The unemployment estimate remained unchanged at 4.5%.

Meanwhile, the rate hike that was expected to move again in 2024, now expected to be two hikes in 2023.