The Thai stock market on Wednesday saw an end to the three-day winning streak in which it gained more than 12 points or 3 percent on its way to a three-month closing high. The Stock Exchange of Thailand is clinging to support at 460 points, although investors expect the market to hand over that level at the opening of trade on Thursday.
The global forecast for the Asian markets is mixed with a touch of downside, thanks to a series of disappointing quarterly reports. Financials are expected to remain under pressure, although some of the bigger exporters and technology stocks may provide support. The European stock markets finished sharply higher and the U.S. markets ended mostly lower - and the Asian markets are predicted to see equal dichotomy.
The SET finished sharply lower on Wednesday, as the energy stocks and financials were generally lower. For the day, the index lost 5.76 points or 1.24 percent to close at 460.62 after trading between 459.31 and 470.46. Volume was 3.508 billion shares worth 18.276 billion baht.
Among the actives, energy giant PTT was off 1.70 percent, while PTT Exploration and Production fell 3.25 percent, PTT Aromatic lost 2.24 percent, coal producer Banpu surged 5.53 percent, Siam Commercial Bank dropped 1.79 percent and Bangkok Bank shed 1.3 percent.
The lead from Wall Street is modest pessimism as stocks experienced considerable volatility over the course of the trading day on Wednesday, with the major averages unable to sustain any significant moves. The choppy trading came as investors continued to digest mixed earnings news.
Early on in the session, traders reacted negatively to quarterly results from Morgan Stanley (MS), which became one of the few major financial companies to report weaker than expected first quarter results. Morgan Stanley reported a much wider than expected first quarter loss of $0.57 per share and revealed that it has slashed its quarterly dividend by 80 percent to $0.05 a share.
Separately, Boeing (BA) reported first quarter net income of $610 million, down 50 percent from last year quarter's $1.21 billion. Revenues for the quarter rose 3 percent to $16.5 billion from last year's $15.99 billion. Looking forward, the aerospace giant reaffirmed its full year revenue guidance but lowered its earnings guidance due to lower earnings at its commercial airplanes business.
Meanwhile, fast food giant McDonald's (MCD) reported first quarter net income of $0.87 per share, compared to $0.81 per share in the same quarter of last year, while analysts expected the company to report earnings of $0.82 per share.
In other news, Treasury Secretary Timothy Geithner spoke to the Economics Club of Washington earlier in the day, hinting that policymakers might be forced to alter their recovery strategies as the global financial crisis drags on. He explained that the revised estimate from the International Monetary Fund for global growth could spark a change in policy. The IMF lowered its 2009 outlook, now predicating a contraction of 1.3 percent for the year compared to its previous estimate of 0.5 percent growth.
The major averages pulled back sharply going into the close, with the Dow and the S&P 500 falling firmly into negative territory. While the NASDAQ managed to hold onto a modest gain, closing up 2.27 points or 0.1 percent at 1,646.12, the Dow closed down 82.99 points or 1.0 percent at 7,886.57 and the S&P 500 closed down 6.53 points or 0.8 percent at 843.55.
In economic news, the Bank of Thailand said on Wednesday that the country's GDP could shrink by between 1.5 percent and 3.5 percent in the current year, reversing from its earlier forecast of economic growth of between zero and 2 percent for the year.
Meanwhile, the central bank expects consumer prices to increase either by up to 1 percent or fall by a maximum of 1 percent in the current year. In its previous report, it estimated consumer prices to rise by almost 0.5 percent or fall by a maximum of 1.5 percent in 2009.
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