Maybank Kim Eng expected a correction in the Thai stock market and rebase after the downfall in Wall Street yesterday on the concern of U.S. inflation and rate hike.
Investors showed signs of concerns over consumer inflation data for April that rose 4.2% from a year ago, beating economists expectations of 3.6%, resulting in higher treasury yields and stocks lower.
Amid high inflation rate and a fast-growing economy in the U.S. after the recovery from the pandemic, investors feared that the Fed could hike interest rate sooner than expected.
For short term outlook, Maybank expected the SET Index to correct and form a base to respond to concerns from rising US inflation. The security company believed that during this one month, both bond and stock markets will focus on short term factors rather than long term ones. Investors are recommended to add caution in the Growth Stock segment that may have uncertainties in the expected profit outlook.
However, with the big picture structure of the Thai stock market with high value stocks, it is expected that during this month, the 1500 pts level will remain a strong support level. Maybank expected the SET index today to correct with the support level at 1,550 points and resistance at 1,580 points.
Investors are also recommended to wait and see the Fed meeting on 15 16 June to set important policy in the next period.