The Thai stock market faced significant pressure on February 27, 2024, as it declined by over 10 points amid growing concerns surrounding the uncertainty of U.S. trade tax policies. This decline is reflective of broader market trends across Asia, where investor sentiment has also taken a hit from external economic policies.
At the close of the morning session, the Stock Exchange of Thailand (SET) index reported at 1,217.40 points, down 13.74 points or -1.12%. The climate of uncertainty can be attributed largely to the ambiguous future of U.S. tax regulations concerning trade, particularly with Canada and Mexico. There remains speculation over whether these tax policies will be postponed, originally set to be enacted by March, or expanded to European imports.
Veerawatt Virojphoka, a senior analyst at FSS International Investment Advisory, commented, "The SET index dropped by 10 points, facing pressure from uncertainties surrounding U.S. trade tax policies." He identified the energy sector as particularly susceptible, observing significant selling pressures which contributed to the market downturn.
The situation has been exacerbated by fears of potential trade barriers with China, leading to widespread caution among investors. Market analysts are concerned about the sustainability of the growth seen within the Thai economy, especially considering the reliance on external trade relationships.
With the Thai SET index showing vulnerability, several analysts have projected support levels at 1,215 points, indicating where they predict the market may stabilize temporarily. A resistance level has been identified around the 1,230-point mark. Investors are advised to approach the market with vigilance during this period of uncertainty.
Overall, the importance of closely monitoring both local and international policy developments is underscored by these recent shifts. The intersection of U.S. tax policy and its repercussions on the Thai market serves as both a warning and insight for investors, highlighting the interconnected nature of global finance.
Investors must not only keep track of the immediate effects of these policies but also be prepared for subsequent shifts within the Thai economic environment. This requires observing market responses not only from local equities but through the lenses of regional market dynamics and their related trends.