The Thai stock market on Wednesday snapped the modest two-day winning streak in which it had risen just 5 points or 0.5 percent. The Stock Exchange of Thailand finished just above the 1,055-point plateau, and now analysts are forecasting a positive bounce for the market when it kicks off trade on Thursday.
The global forecast for the Asian markets is mixed to higher, thanks to optimism regarding the latest monetary policy statement from the Federal Reserve. The upside may be capped, however, by hurt by lingering debt concerns from Greece. Gold shares are expected to provide support, along with steel, oil and property stocks. The European markets finished lower and the U.S. bourses moved higher, and the Asian markets are tipped to follow the latter lead.
The SET finished modestly lower on Wednesday as losses from the energy producers were cushioned by support from the financial sector.
For the day, the index shed 7.07 points or 0.67 percent to finish at 1,056.01 after trading between 1,054.84 and 1,067.32. Volume was 3.546 billion shares worth 19.749 billion baht. There were 257 decliners and 174 gainers, with 168 stocks finishing unchanged.
Among the actives, energy giant PTT was down 1.21 percent, while PTT Exploration and Production shed 1.98 percent, coal miner Banpu fell 1.03 percent and Kasikornbank collected 0.40 percent.
The lead from Wall Street is firmly positive as stocks showed a strong upward move on Wednesday, benefitting from the latest monetary policy statement from the Federal Reserve which said economic conditions are likely to warrant exceptionally low interest rates at least through late 2014.
The Fed has kept its target for the federal funds rate at zero to 0.25 percent since December of 2008. The central bank previously indicated that it planned to keep rates at near-zero levels through at least mid-2013. The Fed noted that its pledge to keep rates at exceptionally low levels reflects expectations for low rates of resource utilization and subdued inflation over the medium run.
At the same time, the central bank said that data received since its last meeting in December suggests that the economy has been expanding moderately, despite some slowing in global growth. With regard to the economic outlook, the Fed said it expects GDP to grow by 2.2 percent to 2.7 percent in 2012, reflecting a downward revision from the 2.5 to 2.9 percent growth forecast in November.
By contrast, sentiment may be capped by lingering concerns that Greece may default on its sovereign debt. Greece said it aims to complete a debt swap deal with its private creditors by week's end, but markets remained skeptical.
Also, the National Association of Realtors reported that pending home sales fell 3.5 percent to a reading of 96.6 in December from a reading of 100.1 in November. Economists had been expecting the index to drop by about 1.0 percent.
The major averages closed firmly in positive territory, near their best levels of the day. The Dow rose 83.10 points or 0.7 percent to 12,758.85, the NASDAQ jumped 31.67 points or 1.1 percent to 2,818.31 and the S&P 500 climbed 11.41 points or 0.9 percent to 1,326.06. With the gains on the day, the Dow reached an eight-month closing high, while the NASDAQ and the S&P 500 ended the session at nearly six-month closing highs.
On the economic front, the Bank of Thailand on Wednesday decided to cut the key policy rate for a second consecutive rate-setting session to spur economic growth, hit hard by widespread flooding during October last year and a slowdown in global demand. The central bank said that the monetary policy committee (MPC) voted unanimously to reduce the policy rate by 0.25 percent, from 3.25 percent to 3.00 percent.
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