The SET Index has recently experienced significant fluctuations, capturing the attention of investors and market analysts alike. On February 28, 2025, the SET Index opened at 1,795.12 points, reflecting market anxiety over various factors, including international trade tensions and domestic economic data. Notably, this marked a decline from previous days, as concerns over the potential impact of U.S. trade policies and inflation data weighed on investor sentiment. "The market is reacting to external pressures and domestic issues," stated Pou Panichpibul, a market strategist at Krungthai GLOBAL MARKETS.
Over the past week, the SET Index exhibited volatility, fluctuated within the range of 1,790 to 1,820 points. Analysts attribute this instability to global uncertainties, such as fluctuations in the value of major currencies and commodity prices. For one, the Thai baht opened at 34.08 baht against the U.S. dollar, depreciated from 33.90 baht the previous day. This depreciation is significant as it impacts investor confidence and foreign investment patterns.
Market experts have noted the interconnectedness of the SET Index with global markets, particularly amid concerns about inflation and rising interest rates. Reported figures reveal expectations for the U.S. Federal Reserve to continue its rate adjustments, potentially leading to three cuts within the year as analysts project. This speculation is bolstered by mixed economic data arising from the U.S.
"We are likely to remain on alert as we inch closer to the release of the inflation report, which could shift market dynamics significantly," asserted Pou Panichpibul, indicating the close attention investors should pay to these developments.
Moving forward, market analysts anticipate potential range-bound trading for the SET Index, with estimates of 1,790 to 1,820 points over the next few days. They also expressed how rising commodity prices, particularly gold, could trigger additional volatility.
Specifically, the price of gold, which has been hovering around $2,890 per ounce, presents insights on market sentiment. A decline below key support levels of $2,870 to $2,880 could foreshadow additional bearish trends. Should gold prices rebound, it might provide necessary support for the Thai baht and the SET Index amid international tensions.
Investors are also advised to monitor developments concerning U.S. tariffs on imports from trading partners, including China, Europe, and other regions, which could result in increasing pressure on currencies perceived as vulnerable to trade disruptions.
The geopolitical climate surrounding international trade, especially the comments made by President Donald Trump about enhancing tariffs, has added stress to the markets. The impending tariffs propose a potential 25% levy on products from Canada and Mexico, alongside increased 10% tariffs on Chinese goods, which could impact the overall market outlook.
These sentiments reverberate through Asian markets, with currencies like the euro and the Chinese yuan also exhibiting weakness. The regional response to the dollar's strengthening is considered important as these trends affect cross-border investments and trade.
Throughout February, the fluctuations of the SET Index reflect investors' responses to the continuous flow of economic data and political developments. Analysts assert it is important for stakeholders to adopt diverse strategies for risk management, including using options and local currencies to hedge against exchange rate movements.
Looking at the North American markets, stocks experienced considerable drops, particularly within the technology sector, including major firms like Nvidia, which fell 8.5% after disappointing earnings. The Nasdaq Index dropped 2.78% and the S&P500 fell 1.59%, highlighting the sell-off stemming from earnings-related concerns.
Meanwhile, U.S. bond yields also illustrated market tensions, with the 10-year yield dropping to 4.24% as traders braced for potential shifts resulting from forthcoming economic reports. The mixed economic signals contribute complexity, encouraging investors to remain vigilant about market entries and exits.
Overall, the current state of the SET Index and the broader financial market reflects the underlying tensions of international trade, consumer sentiment, and economic policies. With anticipation building around the upcoming PCE inflation report from the U.S. and potential trade policy changes, stakeholders should brace for possible volatility.
Investors are encouraged to stay informed and adaptive as they navigate these shifting currents, ensuring they can effectively manage risks amid the uncertain economic environment.