Bangkok: Thai stocks and Asian stock markets opened positively, buoyed by the recent trade agreement between the United States and China, while the baht experienced a weakening trend.
According to Thai News Agency, Thai stocks kicked off the morning session with a 20-point increase, aligning with the broader Asian markets uplift driven by the US-China trade deal. Investors are keenly observing the release of the US Consumer Price Index (CPI) today, which will provide insights into the inflation outlook and influence the direction of US Federal Reserve’s interest rates. Furthermore, attention is on Fed Chairman Jerome Powell’s upcoming speech at the Thomas Laubach Research Conference in Washington, D.C., scheduled for Thursday, May 15.
In the broader Asian market, the Nikkei index opened at 38,149.53 points, rising by 505.27 points or 1.34%. The Shanghai Composite Index started at 3,386.23 points, gaining 16.99 points or 0.50%, while Hong Kong’s Hang Seng Index saw a minor decline, opening at 23,494.44 points, down 55.02 points or 0.23%.
Thai stocks initially rose by 20 points but slightly retracted to an increase of 16.15 points at 10:09 a.m., with the index at 1,227.09 points. The positive momentum in Thai stocks followed the global trend after China and the US agreed to a temporary reduction in customs duties by 115% each for 90 days, alleviating fears of an escalating trade war. This agreement lowered US taxes on Chinese goods from 145% to 30%, while China reduced tariffs on US imports from 125% to 10%.
The easing trade tensions led to a significant decline in gold futures on the New York market, which dropped over 3% as investors moved away from the safe-haven asset amid the strengthening US dollar. The June delivery gold futures on COMEX fell by $116, settling at $3,228.00 per ounce.
In Thailand, the Gold Traders Association announced a 100 baht increase per baht of gold, with gold bars priced at 51,100 baht and finished gold at 51,900 baht, due to a slight uptick in the GOLD SPOT price to 3,229 US dollars per ounce. Concurrently, the baht weakened to approximately 33.42 baht per dollar.
Mr. Poon Panichpiboon, Strategist for Money and Capital Markets at Krungthai GLOBAL MARKETS, Krungthai Bank, noted that the baht opened at 33.38 baht per dollar this morning, marking a noticeable depreciation from the previous week’s close at 33.02 baht per dollar. This depreciation is attributed to reduced concerns over the US economy’s slowdown and shifting expectations regarding the Fed’s interest rate cuts, with speculation of potential rate cuts later in the year. Additionally, the baht was pressured by falling gold prices, which dropped to the $3,200 per ounce range.
Investors are also monitoring the evolving political landscape in Thailand, which is beginning to show signs of uncertainty. Market participants are awaiting the performance reports of listed companies, with the baht’s depreciation momentum showing strength as it breaks through key levels. The baht is anticipated to fluctuate between 32.95 and 33.75 baht per dollar this week.