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Thai Stocks May Find Resistance At 1,200 Points

3/18/2012 10:17 PM ET

The Thai stock market has closed higher now in four straight sessions, climbing almost 40 points or 3.7 percent along the way. The Stock Exchange of Thailand finished just below the 1,190-point plateau, and now investors are expecting the rally to slow when the market opens on Monday.

The global forecast for the Asian markets is flat with a hint of negativity in response to weaker than expected economic data from the United States following a report that industrial production unexpectedly was unchanged in February. Unexpected weakness in consumer sentiment adds to the overall caution. The European markets finished slightly higher and the U.S. bourses were mixed but little changed, and the Asian markets are expected to follow the latter lead.

The SET finished sharply higher on Friday following major gains from the financial shares and the energy producers.

For the day, the index surged 18.22 points or 1.56 percent to finish at the daily high of 1,189.56 after trading as low as 1,173.95. Volume was 6.584 billion shares worth 43.398 billion baht. There were 344 gainers and 161 decliners, with 160 stocks finishing unchanged.

Among the gainers, energy giant PTT was up 2.61 percent, while PTT Global Chemicals spiked 4.03 percent, PTT Exploration and Production added 0.58 percent, Siam Commercial Bank jumped 2.14 percent, Kasikornbank collected 1.62 percent and Bangkok Bank rose 0.27 percent.

The lead from Wall Street supplies little guidance as stocks showed a lack of direction throughout the trading session on Friday, with traders reluctant to make any significant moves following the recent rally. The markets eventually ended the choppy trading session nearly flat.

While stocks did not follow-through on the recent upward move, it is worth noting that traders did not cash in on the recent gains amid concerns about missing out on any further upside.

On the economic front, the Labor Department reported that its consumer price index rose by 0.4 percent in February following a 0.2 percent increase in January. Economists had expected the index to increase by about 0.5 percent. Excluding food and energy prices, the core consumer price index edged up 0.1 percent in February compared to a 0.2 percent increase in the previous month. Core prices had been expected to increase by about 0.2 percent.

Separately, the Federal Reserve said that industrial production unexpectedly came in unchanged in February after rising by a revised 0.4 percent in January, with a sharp drop in mining output offsetting continued growth in the manufacturing sector. Economist had expected production to increase by 0.5 percent after initial data showed that production was unchanged in the previous month.

Finally, Reuters and the University of Michigan also released their preliminary report on consumer sentiment in March, showing an unexpected deterioration. The consumer sentiment index fell to 74.3 in March from 75.3 in February, surprising economists, who had expected the index to increase to 76.0.

The major averages bounced back and forth across the unchanged line before finishing mixed. While the S&P 500 crept up 1.57 points or 0.1 percent to 1,404.17, the Dow slipped 20.14 points or 0.2 percent to 13,232.62 and the NASDAQ edged down 1.11 points or less than a tenth of a percent to 3,055.26. Despite the mixed performance, the major averages all showed strong upward moves for the week. The Dow and the S&P 500 both rose by 2.4 percent, while the NASDAQ climbed 2.2 percent.

In economic news, Thailand's international reserves fell to $179.1 billion in the week ended March 9 from $180 billion in the week ended March 2, the Bank of Thailand said on Friday. Gold reserves totaled $8.47 billion, almost steady from $8.466 billion in the previous week. Special Drawing Rights amounted to $1.5 billion, unchanged from the previous week.

Thailand's reserve position with the International Monetary Fund fell slightly to $698.3 million from $699.5 million. Foreign currency reserves totaled $168.5 billion, compared to $169 billion in the previous week.

by RTT Staff Writer

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