• Japan’s fisal measures short of investors’ expectations: The Japanese government on Tue approved 28-trillion-yen in fiscal measures to bolster the world’s third biggest economy but the fiscal package however disappointd the market as it fell short of investors’ expectations while the Japanese yen remained in bullish form.
• Crude oil still in the doldrums, global equity markets sliding into correction mode: Not only would weak oil prices continue to weigh on energy counters today after WTI crude oil prices settled at below US$40/barrel on Tue, bearish sentiment in overseas markets may also put more pressure on the recovery of the Thai stock market after global equities markets slipped into correction territory.
• Foreign buying losing steam: Net foreign buying of thai shares dropped to less than Bt2bn over the last three sessions as foreign investors stayed sidelined ahead of the charter referendum on Aug 7.
• Thai stocks in correction phase: The SET index is likely to continue its correction phase until fresh positive catalysts kick in. Today the BOT’s policy meeting will be the main economic event of the day but the impact may be neutral for the market as it is expected to stay pat on rates. In a big-picture sense, we believe correction would be on the cards for Thai stocks for a test of key support level at 1490 points, a stop loss point for short-term trading today. Cut loss if the SET index fails to hold above this support level. The trading range for the main index is seen at 1490-1510 points today.
• Investment strategy: Under current market conditions, selective play looks appropriate with a stop loss point set at 1490 points.
(1) Tourism recovery play: Hold onto AOT.
(2) Selective play: Hold onto CPF.
(3) Upside momentum play: Hold onto SCN.
Source: poems.in.th / settrade.com
