RTTNews - One day after snapping the four-day winning streak in which it had gathered nearly 40 points or 7 percent en route to an eight-month closing high, the Thai stock market headed right back to the upside in Wednesday's trade. The Stock Exchange of Thailand broke through resistance at 580 points, although analysts are predicting a modest retreat at the opening of trade on Thursday.
The global forecast for the Asian markets is heavy on pessimism, as many of the bourses are riding lengthy winning streaks and are overdue for a correction. Some uninspired economic data out of the United States adds to the negative sentiment. The European markets finished sharply lower, and the U.S. markets also ended firmly in the red, and the Asian markets are also forecast to move to the downside.
The SET finished sharply higher, buoyed by major gains in the financial sector. Construction stocks also were up after the Thai court upheld the use of an executive decree empowering the government to borrow $11.7 billion domestically to boost the country's ailing economy.
For the day, the index added 7.95 points or 1.38 percent to close at 582.25 after trading between 578.44 and 588.15. Volume was 5.96 billion shares worth 30.743 billion baht.
Among the actives, energy giant PTT eased 0.44 percent, while PTT Exploration and Production added 0.36 percent, PTT Aromatics was down 0.49 percent, coal producer Banpu fell 0.29 percent, Kasikornbank gained 6.44 percent, Siam Commercial Bank jumped 8.63 percent, Siam Cement rose 2.6 percent, TPI Polene jumped 18.3 percent and Tata Steel was up 1.2 percent.
Wall Street offers a negative lead as stocks snapped a four-day winning streak on Wednesday, seeing a moderate retreat over the course of the trading session. The major averages all moved lower, as traders did some profit taking in reaction to some discouraging economic data.
Earlier in the day, Automatic Data Processing, Inc. (ADP) said that private sector employment experienced another notable decline in the month of May, with the decrease in jobs slightly exceeding economist estimates. ADP said non-farm private employment fell by 532,000 jobs in May following a revised decrease of 545,000 jobs in April. Economists had expected a decrease of about 525,000 jobs compared to the decline of 491,000 jobs originally reported for the previous month.
While a separate report from the Institute for Supply Management showed a slower pace of contraction in the service sector in the May, the index of activity in the sector increased by less than economists had expected. The ISM said its index of activity in the service sector rose to 44.0 in May from 43.7 in April, although a reading below 50 indicates a continued contraction in the sector. Economists had been expecting a somewhat more notable increase to a reading of 45.0.
Additionally, the Commerce Department released data showing a notable increase in factory orders in the month of April, but the increase came after a substantial decline in the previous month and came in slightly below economist estimates.
Traders largely shrugged off comments from Federal Reserve Chairman Ben Bernanke, who said recent data suggests that the economy will likely slow its pace of contraction on the back of improved consumer sentiment and consumer spending. Bernanke also warned of the potentially dire consequences of allowing the deficit to remain high and called on Congress to consider long-term steps for fiscal balance.
While the major averages moved well off their worst levels of the day in late day trading, they remained firmly negative. The Dow closed down 65.63 points or 0.8 percent at 8675.24, the NASDAQ closed down 10.88 points or 0.6 percent at 1825.92, and the S&P 500 fell 12.98 points or 1.4 percent to 931.76.
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