RTTNews - The Thai stock market has finished higher now in four straight sessions and in 12 or the last 13 trading days on its way to a fresh seven-month closing high. The Stock Exchange of Thailand broke through resistance at 560 points, but now analysts predict that the market will see a slight downside correction at the opening of trade on Thursday.
The global forecast for the Asian markets is slightly negative on fresh concerns that the worldwide economic slowdown may last longer than originally thought - which could put the financials under pressure. The price of crude oil rose back above $62 to a six-month high, which is expected to provide support for the commodity plays. The European markets provide a positive lead, while the U.S. markets all ended modestly in the red - and the Asian markets are also projected to trend lower.
The SET finished higher again on Wednesday, boosted by gains among the financials and the energy stocks. For the day, the index was up 4.94 points or 0.89 percent to close at 561.41 after trading between 556.64 and 565.31. Volume was 5.102 billion shares worth 24.146 billion baht.
Among the actives, energy giant PTT was up 0.92 percent, while PTT Exploration and Production added 1.18 percent, PTT Chemical was off 1.40 percent, coal producer Banpu gained 2.27 percent and Siam Commercial Bank fell 1.75 percent.
The lead from Wall Street is modestly pessimistic as stocks finished Wednesday's trading session modestly lower, unable to sustain earlier gains. The major averages all slipped into negative territory in mid-afternoon dealing, closing just off of their worst levels of the day. Trading this week has been largely subdued as many traders sat on the sidelines following considerable profit taking last week, prompted by the run up in equities in recent months.
Traders digested the latest minutes of the Federal Open Market Committee released earlier this afternoon, which revealed some debate within the policymaking arm of the Federal Reserve over whether or not to purchase additional treasury securities. Although the final decision was to stick with the $300 billion agreed on at the March meeting, in late April some officials thought that purchasing more could spur recovery. While there was some debate over whether or not additional purchases would be needed, officials agreed that such a purchase was not warranted at that time.
Earlier, traders heard comments from treasury Secretary Timothy Geithner who issued cautious optimism regarding the recovery of the embattled financial sector, while Bank of America (BAC) was able to raise a substantial amount of capital, further bolstering prospects for the industry. The day's trading was also impacted by better-than-expected earnings from Target (TGT) and Deere (DE).
In other news, the House of Representatives passed a landmark credit card industry reform bill Wednesday afternoon, sending legislation designed to crack down on the credit card industry to President Barack Obama. The 361-64 vote sends the bill Obama's desk and he is expected to sign it as early as Friday.
The major averages all closed slightly lower a late day selloff dragged the indices into negative territory. The Dow closed lower by 52.81 points or 0.62 percent to finish at 8422.04, while the NASDAQ was down 6.70 points or 0.39 percent to end at 1727.84, and the S&P 500 slipped by 4.66 points or 0.51 percent to finish at 903.47.
In economic news, the Thai central bank on Wednesday held its key interest rate on hold, defying expectations for a quarter point reduction and pausing the series of rate cut that begun in December 2008. The monetary policy committee of the Bank of Thailand retained its policy interest rate at 1.25 percent per annum following reductions in the past four months. Meanwhile, economists had expected the central bank to make another cut of 25 basis points. In April, the Thai central bank had slashed the rate by 25 basis points, taking the cumulative reduction to 250 basis points.
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