The Thai stock market added less than a point on Tuesday, but that was enough to extend the market's winning streak to three sessions - collecting more than 12 points or 3 percent on its way to a three-month closing high. The Stock Exchange of Thailand is holding support at 460 points, and now investors are looking for additional gains in Wednesday's trade.
The global forecast for the Asian markets is fairly optimistic, despite some weaker than expected corporate earnings news. But the financials are expected to climb following positive comments from U.S. Treasury Secretary Timothy Geithner. The European markets were mixed and largely near the unchanged line, while the U.S. markets ended sharply higher - and the Asian markets are tipped to land somewhere in between.
The SET finished barely higher on Tuesday as strength among the energy stocks was largely offset by weakness among the financials. For the day, the index added 0.10 points or 0.02 percent to close at 466.38 after trading between 459.33 and 467.05. Volume was 3.758 billion shares worth 14.886 billion baht.
Among the actives, energy giant PTT was off 0.84 percent, subsidiary PTT Exploration and Production fell 1.96 percent, coal producer Banpu added 0.80 percent and PTT Aromatics was up 0.75 percent, while Siam Cement and Bangkok Bank also ended lower.
Wall Street offers a broadly positive lead as stocks showed a strong upward move over the course of the trading day on Tuesday, partly offsetting the steep losses posted in the previous session. While stocks saw initial weakness on disappointing earnings news, a positive reaction to comments from Geithner drove the markets higher.
The initial weakness came after Dow component Merck (MRK) reported first quarter earnings that fell short of analyst estimates and lowered its full year revenue guidance. Caterpillar (CAT) also slashed its full-year guidance, although it reported much better than expected adjusted first quarter earnings.
In other earnings news, chemical giant DuPont (DD) reported first quarter earnings that fell year-over-year and lowered its full-year guidance. The company's downwardly revised earnings guidance brought it in line with analyst estimates.
The turnaround by the markets was partly due to comments from Geithner, who assured the Congressional Oversight Panel that there is enough money left in the government's $700 billion financial rescue program to stabilize the financial system. Geithner said there is at least $134.4 billion in funds left. The Treasury Secretary also said that the vast majority of U.S. banks have enough capital and hinted that the credit markets may be thawing following their deep freeze.
Indicators on interbank lending, corporate issuance and credit spreads generally suggest improvements in confidence in the stability of the system and some thawing in credit markets, Geithner said.
The major averages moved to the upside going into the close, ending the session at or near their best levels of the day. The Dow closed up 127.83 points or 1.6 percent at 7,969.56, the NASDAQ closed up 35.64 points or 2.2 percent at 1,643.85 and the S&P 500 closed up 17.69 points or 2.1 percent at 850.08.
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