INVESTMENT experts forecast slower going in the march of the Thai stock market this month, with the pace of gains expected to ease as investors await further clues on the direction of the US Federal Reserve’s monetary policy.
They also expect the baht to remain steady amid the uncertainties.
Nuttachart Mekmasin, assistant managing director for research at Trinity Securities, said that the Stock Exchange of Thailand (SET) Index could slow down in its rising trend when it encounters the first resistance level of 1,720 points and the key resistance level of 1,750s. The key support level is 1,650 points.
When the SET Index stays around 1,700 points or higher, equivalent to a forward market price to earnings (P/E) ratio of 14.1 times, it could become fragile in term of valuations, Nuttachart said.
The SET Index yesterday inched down 0.08 point to 1,701.79, with daily trading turnover of Bt57.01 billion.
This month short-term positive sentiment could come from better-than-expected earnings results from the banks and other groups that are due to be announced later, Nuttachart said.
Jitipol Puksamatanan, a strategist of Krungthai Bank, said the baht this week would likely move in a range of 33.25-33.35 to the US dollar on a daily basis and 33.10-33.60 for the week.
This week, movements in the monetary policy committees in several countries - including the United States, Britain and Japan - as well as US workforce figures should be kept on watch. These moves could prompt the US dollar to rise, while markets could continue to adopt a risk-off attitude, Jitipol said.
Monetary tightening have heightened market volatility but “we believe that risk to more monetary tightening is not much” and finally, markets will return to focus mainly on economic expansion and inflation, he said.
It is possible for markets to make corrections to wait for economic certainty in the future, he said.
On the equity side, markets have been concerned over trade sanctions between the US and other countries which could affect main markets of US companies, erode their profitability and raise borrowing costs across the world, he said.