The number of Americans filing for unemployment benefits surprisingly fell to the lowest level in 42 years while US stocks ceded ground after mixed bag of earnings. Oil prices dropped after two straight days of gains, a factor that may trigger profit-taking in energy counters today. In a big-picture sense, Thai stocks may be due for a pullback in the near term after a string of 6 in 7 straight sessions of higher closes which pushed the SET index up by 5%. The trading range for the main index is seen at 1400-1430 points today.
The US Labor Department said on Thu that initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 247,000 for the week ended Apr 16, the lowest reading in more than 40 years. On Wall Street, the S&P500 lost ground after a mixed bag of quarterly results.
In the oil market, WTI crude oil prices fell as concerns over a global glut took center stage after Russia, Saudi Arabia, Iran and Lybia hinted at output hikewhille crude inventories in the US climbed upwards. For this reason, watch out for a possible bout of profit-taking in energy counters.
Even though foreign investors scooped up Thai shares on Thu, the baht however confined to the weak side above 35 to the US dollar.
In our view, Thai stocks may remain in a ‘go-nowhere-fast’ mode due to the fact that current valuation is no longer cheap at 15x FY16 forward P/E and after a string of 6 in 7 straight sessions of higher closes, which pushed the SET index up by around 5% from 1360 points to 1424 points, leaving it vulnerable to short-term profit-taking . First-quarter earnings season should also be in focus.
For short-term strategy, selective trading is advised with equity holdings maintained at 40%-60% of the portfolio.
(1) Tourism recovery play: Hold onto AOT, CPALL and SPA shares.
(2) Selective play: Hold onto WHA and MAJOR shares.
(2) Selective play: Hold onto WHA and MAJOR shares.
Source: poems.in.th / settrade.com
