Stocks in Asia Edge Higher despite Warning from Analysts of Fluctuation and Rebasing

Stocks in Asia moved higher on Monday after volatile sessions last Friday from profit-taking and speculating buy from investors, while foreign investors also pulled back to seek higher returns in U.S. treasuries and gold.

 

As of 9:31 local time in Thailand on Monday, Nikkei rose 0.91%, SSEC increased 0.15%, HSI jumped 1.22%, ASX200 advanced 0.34% and Kospi gained 1.14%.

Last Friday, SET Index closed at 1,466.98 points, decreased 1.53 points or 0.10% with a trading value of 95.7 billion baht.

 

Despite a positive outlook in the regional markets, Finansia Syrus Securities (FSS) expected SET Index to fluctuate and could edge lower in the short-term, following negative sentiment in the market over the manipulation of the stock in Wall Street that could lead to a bubble. The wild movement in share prices such as in GameStop caused hedge funds to lose quite an amount of investment.

The analyst forecast SET Index to move in a range of 1,450-1,480 points as fund flow is expected to retreat from risk assets to US notes, treasuries and gold. Meanwhile, the analyst stated that China announced that its manufacturing and services PMI in January grew at a slower pace, which reflected a fragile economic recovery. Still, the analyst estimated SET Index to rebase at a support level of around 1,450 as liquidity is expected to remain high from the central bank’s economic stimulus plans and the constant delivery of the coronavirus vaccine.

The analyst recommended a “Speculative Buy” on stocks that were estimated to report positive 4Q20 earnings for short-term outlook.