SET Plunges 17pts, Breaking the 1,555 Resistance Level as Fear over U.S. Rate Hike Grows
SET Index fell 17pts, breaking the 1,555 resistance level as concerns over the U.S. rate hike grew after CPI increased faster-than-expected.
The Stock Exchange of Thailand (SET) Index plunged 17.39 points or 1.11% to 1,554.46 points with a trading value of 13 billion baht a few minutes after the opening bell on May 13, 2021.
The decline was in line with other stock markets in Asia, showing concern over the U.S. 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 rates sooner than expected.
As of 10:08 local time in Thailand, Nikkei plunged 1.84%, SSEC fell 0.67%, HSI dropped 0.72%, ASX 200 dipped 0.39% and Kospi slipped 0.19%.
Last night, Dow Jones fell 681 points or 1.99% to close at 33,587.66 points. S&P 500 plunged 2.14% and Nasdaq dropped 2.67%.
For short term outlook, Maybank Kim Eng 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 points 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.