RECAP: Asian stocks advanced yesterday after US President Donald Trump announced a trade deal with the UK and signalled that tariffs on Chinese goods may fall if preliminary talks this weekend in Switzerland go well.
Fund inflows have returned to the Thai market amid optimism about global trade deals and speculation over further interest rate cuts, strengthening the baht. For the month to date, institutional investors had net buying of 5.1 billion baht in the Thai market.
The SET index moved in a range of 1,187.86 and 1,221.34 points this week, before closing yesterday at 1,210.94, up 1% from the previous week, with daily turnover averaging 43.86 billion baht.
Institutional investors were net buyers of 3.74 billion baht, followed by foreign investors at 2.37 billion. Retail investors were net sellers of 5.84 billion baht, followed by brokerage firms at 260.45 million.
NEWSMAKERS: The US Federal Reserve maintained its policy interest rate at 4.50%, as widely expected. Chairman Jerome Powell said the central bank does not want to make a "preemptive interest rate cut" as it is difficult to assess whether inflation risk or recession risk is higher.
- Trump and British Prime Minister Keir Starmer announced a "historic" trade agreement, under which Washington will lower tariffs on British luxury cars and lift them entirely on steel and aluminium. However, the 10% baseline levy on British imports stays in place. Britain will open its markets to US beef and other farm products.
- The EU said it is planning to hit €95 billion worth of US exports with additional tariffs if ongoing trade talks with Trump's team fail to yield a satisfactory result.
- Treasury Secretary Scott Bessent is scheduled to lead US officials in talks with Chinese trade officials in Switzerland this weekend to kickstart trade negotiations.
- China's central bank cut interest rates and made it easier for banks to increase lending and pump more money into the economy, in the most significant steps taken by Chinese officials to limit the impact of the trade war.
- Chinese exports rose much more than expected last month, official data showed. Experts said the 8.1% rise indicated that Beijing was rerouting trade to Southeast Asia to mitigate US tariffs.
- The Bank of England on Thursday cut its key interest rate as widely expected by a quarter point to 4.25% as the threat of US tariffs starts to weigh on economic growth.
- The US trade deficit increased 14% to a record $140.5 billion in March as companies rushed to import products including pharmaceuticals before new tariffs kick in.
- Chinese President Xi Jinping is visiting Russia, where the two countries are expected to sign a number of agreements. Among them, the Russian development bank VEB said it would provide 3.5 trillion roubles ($42.7 billion) for joint projects with Chinese businesses.
- Toyota Motor said its operating profit would decline by about one-fifth for the fiscal year ending in March, citing headwinds from a stronger yen. It predicted a $1.3-billion hit from US tariffs in April and May alone.
- The EV unit of the Taiwanese technology giant Foxconn has agreed in principle to develop and supply an EV model to Mitsubishi Motors, the companies said.
- Bitcoin surged past $100,000 for the first time since February, trading around $103,000 on Friday afternoon, up 6% from the day before, driven by positive sentiment toward risk assets following the US-UK trade agreement.
- Fidelity, one of the world's largest equity mutual funds, has invested $35.3 million in bitcoin, signalling increased institutional interest in cryptocurrencies.
- The Joint Standing Committee on Commerce, Industry and Banking revised its 2025 economic growth forecast for Thailand down to between 2% and 2.2%, from 2.4% to 2.9% earlier. It said the 10% US tariff could limit export growth to between 0.3% and 0.9%, down from 1.5% to 2.5%.
- Thai inflation in April turned negative for the first time in 13 months. Headline inflation dropped by 0.2% year-on-year, reflecting lower prices of energy and fresh vegetables, said the Ministry of Commerce.
- Low inflation provides ample room for the Bank of Thailand to cut interest rates at least two more times this year, from 1.75% now, to deal with the impacts of the trade war, according to local analysts.
- Media Intelligence Group revised down its growth forecast for advertising and marketing spending in Thailand this year to 2.2%, representing 87.6 billion baht, from 4.5% earlier, citing unfavourable economic conditions.
- The Department of Foreign Trade has expanded its watch list of products at risk of circumvention from 49 to 65, as it strives to curb misuse of Thai origin for exports, mainly of Chinese goods, to the US.
- The Tourism Authority of Thailand is adjusting its marketing budget of 3.5 billion baht, with plans to add subsidies for chartered flights from China and promotional campaigns for global online travel agents.
- Foreign tourist arrivals in April fell 7.6% from previous month, pressured by a sharp decline in Chinese visitors, who have fallen to second place behind Malaysia. Arrivals in the first four months totalled 12.1 million, down 0.26% from the previous year.
- Air Asia is considering reducing flights from Thailand to China by at least 15% to cope with the Chinese market slowdown.
- Prime Minister Paetongtarn Shinawatra said the third phase of the digital wallet handout is on hold while the government considers how to best use the available funds, totalling 157 billion baht. The money might have to be directed elsewhere if the impact of US tariffs is significant.
- The Rubber Authority of Thailand has recommended postponing the rubber tapping season by one month to June, aiming to reduce global supply by 300,000 tonnes to maintain prices around 70 baht per kilogramme to counter US tariffs.
- CP Group and Global Infrastructure Partners (GIP) announced investment of 105-175 billion baht in data centres and related systems in Thailand through True IDC, a CP subsidiary.
COMING UP: On Monday, euro zone finance ministers meet and the US releases federal budget balance data. On Tuesday, the US releases core inflation. On Wednesday, Germany reports monthly inflation, China announces new loan data and Opec releases its monthly oil market report. On Thursday, the UK and Japan announce first-quarter GDP and the US announces core retail sales.
- Locally, the SET on Wednesday discusses April trading figures. On Thursday, Fetco and the Board of Investment co-host an analysts' meeting on the direct investment outlook.
STOCKS TO WATCH: Daol Securities expects SET index to remain above 1,200 throughout May. It recommends taking profit on stocks that have already seen significant gains and switching into laggards. Top picks are AMATA, NTL, STA, BDMS, ITC, TOP, HANA and BGRIM.
- Also recommended are stocks that could benefit from China's stimulus measures, particularly in petrochemicals and electronics. Top picks are SCGP, IVL, PTTGC, CCET and DELTA.
- InnovestX Securities warns of potential headwinds. The Fed has highlighted the risks of stagflation, a combination of economic slowdown and rising inflation. Locally, several forecasters have downgraded Thailand's 2025 growth forecast to below 2%, which could weigh on sentiment. The brokerage recommends selective accumulation of CPF at a target price of 30 baht, TRUE (14.50 baht) and GULF (70 baht).
TECHNICAL VIEW: Daol Securities sees support at 1,200 points and resistance at 1,250. InnovestX Securities sees support at 1,180 and resistance at 1,250.