Global headwinds weigh on Thai bourse

The Stock Exchange of Thailand (SET) continues to face downward pressure following its sharp decline below 1,500 points on Tuesday, according to analysts. Benjaphol Suthwanish, an assistant managing director at UOB Kay Hian Securities, expects the Thai index to remain under pressure in the short term, similar to other regional bourses.

He cites global financial market volatility stemming from wars, trade tensions, and the upcoming US midterm elections as contributing factors. Commodity markets have also been experiencing uncertainty due to recent US strikes on Iran's Qeshm Island, which could lead investors to reduce exposure to risky assets. Brent crude oil prices increased by 1.23% to $106.1 per barrel, while West Texas Intermediate crude rose 1.03% to $97.74 per barrel.

Analysts anticipate the US Republican Party to lose control of the House of Representatives, while retaining the Senate in the midterm elections, but uncertainty still exists. The key support level for the SET is around 1,520 points, and the next support level is estimated at 1,475 points, indicating a potential short-term downtrend.

Energy investments are viewed as suitable for risk-tolerant investors, with oil prices potentially remaining elevated but unlikely to reach exceptionally high levels due to economic factors. A pullback in oil prices to below $100 per barrel could present a buying opportunity, but if the US election results do not yield a significant negative surprise, the market may stabilize and consolidate.

Investors should also consider the potential Federal Reserve interest rate hike next month, which could negatively impact market sentiment as the year draws to a close. Additionally, concerns over an AI bubble in Thailand have surfaced, with the SOX semiconductor index declining further, and Anthropic's planned $895 billion investment raising questions about the returns on massive AI capital.