The Thai stock market has finished higher now in back-to-back sessions, collecting more than 12 points or 3 percent on its way to a three-month closing high. The Stock Exchange of Thailand broke through resistance at 460 points, but analysts warn that that the market is likely to head sharply lower at the opening of trade on Tuesday, following the rest of the region to the downside.
The global forecast for the Asian markets is sharply negative after disturbing earnings news from Bank of America, which is expected to put financial stocks under heavy pressure throughout the region. The price of crude oil also plummeted overnight, which could put the heat on many of the resource stocks. The European and U.S. markets all suffered heavy losses across the board, and the Asian bourses are expecting a similar fate.
The TSE finished sharply higher on Monday, powered by the energy stocks. For the day, the index gained 9.48 points or 2.08 percent to close at 466.28 after trading between 456.00 and 471.16. Volume was 4.95 billion shares worth 21.995 billion baht.
Among the actives, energy giant PTT soared 5.33 percent, while PTT Exploration and Production added 2.00 percent, PTT Aromatics was up 3.10 percent, PTT Chemical added 5.3 percent, coal producer Banpu lost 0.79 percent, Siam Commercial Bank surged 2.75 percent, Sahaviriya Steel jumped 13.2 percent and Tata Steel was up 15.3 percent.
The lead from Wall Street is broadly pessimistic as stocks moved sharply lower over the course of the trading day on Monday, with the major averages giving back some ground after closing higher for six straight weeks. A negative reaction to the latest earnings news inspired traders to do some profit taking.
Bank of America released its first-quarter results before the market open. While the company posted a better earnings figure than analysts had expected, a significant increase in loan loss protection made investors wary of holding onto the stock.
On the economic front, the Conference Board said its leading economic index fell 0.3 percent in March following a revised 0.2 percent decrease in February. The agency noted that the index has not risen in the past nine months.
In merger news, Sun Microsystems (JAVA) agreed to be acquired by Oracle (ORCL) for $9.50 per share in cash. The offer represents a 42 percent premium to Sun's closing price on Friday. Oracle expects the acquisition to be accretive to its earnings by at least $0.15 per share on a non-GAAP basis in the first full year after closing.
Additionally, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) showed strong upward moves after PepsiCo (PEP) offered to acquire both bottlers for about $6 billion.
Also, with the price of crude oil showing a steep decline, closing down $4.45 at $45.88 a barrel, the oil services sector saw substantial weakness. Reflecting the weakness in the sector, the Philadelphia Oil Services Index closed down 6.7 percent.
The major averages saw some further downside in the latter part of the trading day, ending the session near their worst levels of the day. The Dow closed down 289.60 points or 3.6 percent at 7,841.73, the NASDAQ closed down 64.86 points or 3.9 at 1,608.21 and the S&P 500 closed down 37.21 points or 4.3 percent at 832.39.
In economic news, Thailand is scheduled to release customs trade balance numbers for March on Tuesday afternoon. Imports are predicted to fall 36.2 percent on year following the 40.3 annual decline in February. Exports are projected to contract 14 percent on year after the 11.3 percent fall in the previous month. The trade balance is expected to show a surplus of $4.063 billion after the $3.577 billion surplus a month earlier.
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