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Equities steady after a week of inflation-fed worries

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Recap: Global stocks regained some ground on Friday after a turbulent week triggered by concerns over surging inflation, aggressive rate hikes and slowing economies.

The SET index moved in a range of 1,578.11 and 1,624.26 points this week before closing yesterday at 1,584.38, down 2.77% from the previous week, in daily turnover averaging 80.93 billion baht.

Institutional investors were net buyers of 4.49 billion baht and brokerage firms bought 4.11 billion baht. Retail investors were net sellers of 5.72 billion baht and foreign investors offloaded 2.89 billion baht worth of shares.

Newsmakers: More than $300 billion has been wiped out by a crash in cryptocurrency prices since Monday, with Bitcoin falling to a 16-month low near $25,000 amid a stampede out of so-called stablecoins. Investors grew alarmed after TerraUSD came unmoored from its dollar peg and lost some 80%.

Saudi Aramco on Wednesday dethroned Apple as the world’s most valuable company as surging oil prices drove up shares and tech stocks slumped.

Oil prices advanced after a tumultuous week of trading as investors weigh the prospect of a European Union ban on Russian crude imports and uncertainty over China’s continuing Covid struggles.

Average gasoline prices in the US hit an all-time record this week at $4.37 a gallon (equivalent to 40 baht a litre).

China’s export growth slumped in April to its lowest level in almost two years, as a Covid resurgence shuttered factories, led to transport curbs and caused congestion at key ports.

Chinese tech companies are quietly pulling back from doing business in Russia under pressure from US sanctions and suppliers, despite calls by Beijing for companies to resist overseas coercion.

HSBC is facing pressure from its largest shareholder, China-based Ping An Insurance, to consider splitting off the bank’s Asian operations to improve returns, sources have told Bloomberg.

Higher US interest rates, decades-high inflation and Covid lockdowns in China are adding to investor bets that Southeast Asia’s stock markets may be one of the best places to park their money right now, analysts said this week.

Hawkish expectations for interest rates in Asian emerging markets are piling up as traders become convinced that central banks cannot ignore the threat of domestic inflation any longer.

Malaysia’s central bank unexpectedly raised its benchmark interest rate on Wednesday, as rising commodity prices, strained supply chains and strong demand conditions fanned inflationary pressures.

Singapore has appealed for businesses to hire more locals as a pandemic-driven fall in foreign workers, together with an easing of virus curbs, continues to drive the city-state’s worst labour shortage in two decades.

Copper prices tumbled on Thursday to a seven-month low and other industrial metals fell as traders worried that a slowing global economy would require less metal.

Thailand’s economy is showing signs of improvement this year with slow yet sustainable growth predicted if all involved pitch in to help, Finance Minister Arkhom Termpittayapaisith says.

The Bank of Thailand said the movement of the baht has had a limited impact on inflation and the economy, after the currency reached its weakest rate against the US dollar for five years on Thursday, at 34.75 baht.

The Joint Standing Committee on Commerce, Industry and Banking believes Thailand can manage GDP growth between 2.5% and 4% this year if an increase in the daily minimum wage is appropriate.

Labour groups continue to push for a new minimum wage of 492 baht a day, up 48% from the current average, a proposal viewed as too extreme by many economists and employers.

The economic recovery is being supported by stronger exports, but much will depend on the recovery in foreign tourist numbers, says Finance Minister Arkhom Termpittayapaisith, who remains confident the government will meet its 2022 revenue target of 2.4 trillion baht.

Phuket aims to attract 1 million foreign tourist arrivals in the fourth quarter and 3.5 million in total this year.

Thai food exports are expected to grow by 5% this year after robust growth of 26% in the first quarter, driven by the Russia-Ukraine conflict and mounting concerns about food shortages in many countries.

Durian exports to China will bring in an additional 120 billion baht in revenue this year, says Agriculture Minister Chalermchai Sri-on.

The government will likely extend the diesel price subsidy that is due to end on May 20, Prime Minister Prayut Chan-o-cha said on Tuesday, with the retail price in Greater Bangkok remaining at 32 baht per litre. The real retail price of diesel is 43.50 baht.

Commerce Minister Jurin Laksanawisit has conceded that some product price increases will have to be approved because their makers face sharply higher costs from higher oil prices.

Consumer sentiment plunged for the fourth straight month in April, hitting an eight-month low, as consumers remain concerned about rising costs of living and high oil prices.

The Digital Economy Promotion Agency (Depa) has launched the food delivery platform eatsHUB to help small and medium-sized eateries boost their earnings through digital channels.

The social commerce platform Line Shopping targets 150% growth in the number of participating shops and a rise of 200% in transactions this year, noting that social commerce now accounts for 61% of total e-commerce value.

Coming up: The euro zone will release March trade figures on Monday and Britain will release March employment figures on Tuesday. Also on Tuesday, the US will release April retail sales and Japan will release first-quarter GDP.

Britain and the euro zone will release April inflation on Wednesday. The US will release April building permits, Canada will release April inflation and Australia will release April employment data.

The US will release April existing home sales on Thursday. Britain will release April retail sales on Friday.

Stocks to watch: Capital Nomura Securities recommends gradually investing in stocks that benefit from stagnant and falling energy prices, such as power plants. Top picks include BGRIM, GPSC and GULF. The brokerage recommends IVL and SCGP for petrochemical and packaging stocks and OSP, ICHI and SAPPE in the beverage sector. Long-term investment pics are BCP, TOP, BDMS, BCH ADVANC, DTAC, MAKRO, GPSC, JMT, TIDLOR and KCE. For small and medium stocks, it recommends PYLON, BE8, JMART and BCPG.

Finansia Syrus Securities recommends speculating on stocks expected to report strong first-quarter earnings and value stocks such as GFPT, ILINK, SAPPE, SMT and TH.

Technical view: Capital Nomura sees support at 1,565 points and resistance at 1,604. Maybank Kim Eng Securities sees support at 1,580 and resistance at 1,620.

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