Many stock markets are going through a period of consolidation after economic recovery picture becomes obscure. Following yesterday's sharp pullback, we expect Thai stocks to trade in a tighter range with the possibility of some brief rebound. In our view, the market's correction has not yet run its course. Economic indicators also remain under stress. Next week, the main economic event will be the release of Thailand's 1Q09 GDP data, which is expected to show a sharp contraction. In a big picture, we expect Thai shares to remain choppy in a correction mode today.
For near-term investment strategy, we continue to recommend 'selective trading' with 'buy on dips, sell into strength' tactic.
Resistance : 555-559
Supportn : 540-532
Factors affecting the market:
The Dow Jones Industrial Average declined 129.91 points on Thu after an outlook downgrade for the UK's triple-A credit rating fueled fears that the US with its growing budget deficit and weakened economy could face a similar fate.
NYMEX crude futures took a break from the recent rally, settling down 99 cents at US$61.05/barrel on Thu but some losses were pared before the market's close after the dollar's slide and investor concerns about oil supply after a temporary shutdown of the only US deep seaport.
PM Abhisit Vejjajiva asked the MRTA to hold negotiations with CK to lower its quoted price for the first contract of the purple-line mass transit project as the current quoted price of Bt14,965m remained expensive, which was higher than the previously approved construction budget of Bt13,000m.
Thailand's industrial confidence index improved to 76.3 in Apr 2009 from 69.4 in the prior month.
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