Asian shares advance as Fed pause lifts hopes

RECAP: Asian shares rose to a four-month high yesterday as US economic data lifted expectations that the Federal Reserve is near the end of its rate-hike cycle. Expectations of more stimulus from China also buoyed investor sentiment.

The SET index gained slightly from positive sentiment in US markets, especially for electronics stocks. Thai shares moved in a range of 1,546.48 and 1,569.34 points this week before closing yesterday at 1,559.39, up 0.27% from a week earlier, with daily turnover averaging 48.93 billion baht.

Institutional investors were the top net buyers at 1.44 billion baht, followed by retail investors at 193.78 million baht and brokers at 84.95 million. Foreign investors were net sellers of 1.72 billion baht.

NEWSMAKERS: The Federal Reserve kept interest rates unchanged on Wednesday but signalled that borrowing costs will likely rise by another half percentage point by year-end as it responds to a stronger-than-expected economy and a slower decline in inflation.

• US consumer inflation cooled for an 11th straight month in May, at 4.0% year-on-year, in line with expectations and down from 4.9% in April.
• The European Central Bank on Thursday raised its key interest rate by 25 basis points to a 22 year-high of 3.5%, and left the door open to more hikes, as inflation remains stubbornly high at 6.1%, even as the euro zone economy flags.
• The Bank of Japan yesterday maintained its ultra-easy monetary policy, but pressure is mounting on policy makers to tweak the central bank's yield curve control policy amid stronger-than-expected inflation.
• Japan's benchmark Nikkei gauge closed above 30,000 on Tuesday for the first time in 33 years, led by tech shares on expectations of a flood of investment in chip-related companies.
• The People's Bank of China on Thursday trimmed its key medium-term lending rate to banks by 10 basis points to 2.65%. The move followed a cut of short-term lending rate on Tuesday to restore market confidence and prop up a stalling recovery. China's stock markets rose the most in nearly four months in response to the moves.
• UBS is poised to complete its takeover of Credit Suisse on Monday, but integrating the former banking rival is a Herculean task that clients, bank and Swiss political leaders will be watching closely.
• Airbus has predicted aircraft manufacturers will deliver 40,850 new jets over the next two decades as customers, particularly in Asia, expand their fleets and replace older aircraft with more fuel-efficient models.
• Yadea Group Holdings of China, one of the world's biggest two-wheeled electric vehicle makers, plans to invest $1 billion in a battery factory in the Philippines.
• The Japanese government will provide a ¥120 billion ($853 million) subsidy to Toyota Motor to expand its production of EV batteries, Nikkei reported. Toyota also announced plans to release an EV powered by an all-solid-state battery as early as 2027.
• The Japanese government will cover half the cost of a new supercomputer being built by Sakura Internet in Hokkaido, which alone will triple the country's processing capabilities for developing generative artificial intelligence.
• South Korean authorities have indicted a former Samsung Electronics executive for allegedly stealing semiconductor production secrets to build a rival plant in China.
• Thailand's economy remains strong, despite sluggish exports, though the weaker baht will help support overseas shipments, Finance Minister Arkhom Termpittayapaisith said yesterday.
• The Bank of Thailand expects loan growth to slow as demand eases, though rising interest rates should not be a key factor dampening loan expansion.
• The Excise Department has suspended the head of its Prevention and Suppression Bureau after an internal investigation found he tried to get Highway Police to release a tanker truck that was transporting smuggled oil.
• Experts are warning Thailand to brace for unusually low average rainfall that may lead to drought as a result of the El Niño weather pattern. While global rice stockpiles are close to record levels, El Niño's arrival will put those reserves to the test.
• iTV, the former broadcaster at the centre of a media shareholding controversy involving Move Forward Party leader Pita Limjaroenrat, issued a statement late Thursday clarifying that it is not currently operating a media business.
• The Election Commission is reportedly preparing to endorse MPs-elect and certify the results of the May 14 poll next week, with some reports saying the announcement could come on Wednesday.
• Khon Kaen Sugar Industry Plc (KSL), the country's third-largest sugar producer by sales volume, expects sugarcane supplies for its factories to decrease by 10-15% to 5 million tonnes in the 2023-24 crop year because of dry conditions.
• The short video app TikTok, owned by China-based ByteDance, says it plans to invest billions of dollars in Southeast Asia over the next few years, as it doubles down on the region amid intensifying global scrutiny over its data security.
• Tech spending in Thailand and four other Southeast Asian economies is projected to grow 7% this year to $47 billion, according to the research and advisory firm Forrester.
• Central Pattana Plc is partnering with Evolution Data Centres to develop a 34-megawatt data centre. The "carrier-neutral" centre will support connections to network service providers without limits.
• Thailand received 11.4 million foreign tourist arrivals from January to June 11, with spending of 472 billion baht, the Ministry of Tourism and Sports said.
• Stark Corporation has asked the Securities and Exchange Commission (SEC) to delay the deadline for the submission of its special audit report by another 30 days.

COMING UP: The US will release new building permit data on Tuesday and the UK will release May inflation on Wednesday. On Thursday, Indonesia's central bank holds a policy meeting and Fed chair Jerome Powell will testify at the US Senate. Due Friday and Japanese inflation for May, and euro zone manufacturing and services PMI.

STOCKS TO WATCH: Krungsri Capital Securities says the end of uncertainty about election results next week should be a positive development driving the Thai stock market. Urbanisation plays such as MAKRO, MC, GLOBAL, BJC, TTB, SIRI and ADVANC should benefit.

• Tisco Securities suggests stocks expected to benefit from China's economic stimulus, namely PTTEP, TOP, SCC, IVL, HANA, NER and TKN. Also consider stocks expected to enter the SET50, including TLI and WHA, while AEONTS, BA, BTG, SISB and SNNP are expected to enter the SET100.
• Stocks expected to have good Q2 earnings with growth of over 15% are ADVANC, BEM, BJC, CPALL, MAKRO, MOSHI, SAPPE, SCB, SPA, BDMS, CRC, PRM and TOA. For bargain-hunters, look to BAM, EGCO, MEGA and PLT.

TECHNICAL VIEW: Krungsri Securities sees support at 1,545 points and resistance at 1,572. SBI Thai Online sees support at 1,545 and resistance at 1,570.