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Positive Bounce Tipped For Thai Stock Market

4/17/2012 10:15 PM ET

The Thai stock market headed south again on Tuesday, one session after it had halted the three-day losing streak in which it had fallen more than 45 points or 3.9 percent. The Stock Exchange of Thailand settled just shy of the 1,160-point plateau, and now traders are looking for renewed support at the opening of trade on Wednesday.

The global forecast for the Asian markets is broadly positive, thanks to encouraging signs of health for the global economy. The International Monetary Fund raised its global growth projections for this year and next, citing improvements in the U.S. economy and emerging economies. Also positive was Tuesday's successful Spanish debt auction, in which Spain sold 3.2 billion euros worth of twelve and eighteen-month bills. The European and U.S. markets finished sharply higher and the Asian bourses are expected to follow suit.

The SET finished modestly lower on Tuesday following losses from the financial shares and energy producers.

For the day, the index lost 9.22 points or 0.79 percent to finish at 1,160.23 after trading between 1,156.28 and 1,180.02. Volume was 2.746 billion shares worth 31.105 billion baht. There were 299 decliners and 199 gainers, with 165 stocks finishing unchanged.

Among the actives, energy giant PTT was down 2.62 percent, while PTT Global Chemicals shed 0.37 percent, coal miner Banpu plummeted 3.85 percent, Siam Concrete plunged 3.24 percent, Bangkok Bank collected 1.61 percent, Siam Commercial Bank dropped 2.79 percent and Kasikornbank retreated 1.30 percent.

The lead from Wall Street is upbeat as stocks moved sharply higher on Tuesday as traders reacted positively to news out of Europe and the latest batch of quarterly results.

The rally followed a successful Spanish debt auction. Spain sold 3.2 billion euros worth of twelve and eighteen-month bills, above the target of 3 billion euros. While the yields were well above last month, the auctions attracted improved demand. The results of the bond auctions contributed to a drop in Spanish bond yields and offset some of the recently renewed concerns about the European debt crisis.

Upbeat earnings news also generated positive sentiment, with shares of Coca-Cola (KO) rising by 2.1 percent after the beverage giant reported first quarter earnings that rose to $0.89 per share from $0.82 per share in the same quarter a year ago, beating estimates for $0.87 per share.

Goldman Sachs (GS) also reported better than expected first quarter earnings and announced an increase in its quarterly dividend to $0.46 per share. While Johnson & Johnson (JNJ) also reported stronger than expected earnings growth, the healthcare giant reported a modest drop in sales.

Meanwhile, traders largely shrugged off disappointing U.S. economic data, including a Commerce Department report showing that housing starts fell 5.8 percent to an annual rate of 654,000 in March from the revised February estimate of 694,000. Economists had expected starts to rise to an annual rate of 700,000.

Also, the Commerce Department said building permits rose 4.5 percent to an annual rate of 747,000 in March from the revised February rate of 715,000. With the increase, building permits rose to their highest level since September of 2008. A separate report from the Federal Reserve showed that industrial production unexpectedly came in unchanged for the second consecutive month in March.

The major averages moved roughly sideways going into the close, ending the session near their best levels of the day. The Dow jumped 194.13 points or 1.5 percent to finish at 13,115.54, while the NASDAQ soared 54.42 points or 1.8 percent to end at 3,042.82 and the S&P 500 surged 21.21 points or 1.6 percent to 1,390.78.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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