Asian shares steady after US rally

RECAP: Asian equities were little changed yesterday after Wall Street rallied for the first time this week, powered by a jump in Tesla shares. Concerns about China's economy and a tight US presidential election dented Asian sentiment.

The SET index moved in a range of 1,456.59 and 1,494.67 points this week, before closing yesterday at 1,463.42, down 1.8% from the previous week, with daily turnover averaging 45.67 billion baht.

Retail investors were net buyers of 5.89 billion baht. Foreign investors were net sellers of 2.74 billion, followed by institutional investors at 1.98 billion and brokerage firms at 1.16 billion.

NEWSMAKERS: The US 10-year Treasury yield touched a three-year high of 4.255%, after several Federal Reserve officials supported cautious monetary policy and gradual interest rate cuts.

• The US and Europe are close to finalising a plan to provide Ukraine with a $50-billion loan backed by Russia's frozen central bank assets by the end of the year, Treasury Secretary Janet Yellen said on Tuesday.
• China's central bank cut two key interest rates to historic lows, in the latest move by Beijing to boost sluggish spending and kickstart the economy. The one-year loan prime rate (LPR) was lowered to 3.10% from 3.35%, and the five-year LPR to 3.60% from 3.85%.
• China's third-quarter GDP growth slowed to 4.6%, the lowest in 6 quarters and below the 5% target, despite better-than-expected September consumption and industrial production figures.
• China said Shanghai, Beijing, Guangzhou, Tianjin and Chongqing would hold month-long consumption promotion activities in November as part of government efforts to boost consumer spending.
• The Bank of Canada lowered its benchmark interest rate to 3.75% on Wednesday, the biggest reduction since March 2020, to boost economic growth and keep inflation close to the 2% target.
• Preliminary US composite purchasing managers index (PMI) dats shows the index rose to 54.3 this month from 54.0 in September, indicating the economy started the fourth quarter in solid shape, S&P Global said on Thursday.
• The preliminary composite euro zone PMI nudged up to 49.7 in October from 49.6 but remained below the 50 mark separating growth from contraction.
• US new-home sales jumped to a more than one-year high in September, by 4.1% to an annualised 738,000, government figures showed on Thursday. But existing home sales fell 1% to a 14-year-low of 3.84 million, as potential buyers delayed purchases hoping for lower mortgage rates.
• Bank of Japan Governor Kazuo Ueda hinted on Wednesday that more interest-rate hikes are coming, saying that figuring out the right size and timing is his main preoccupation.
• Tesla shares surged 22% after the EV maker reported surprisingly strong earnings and forecast as much as 30% growth in vehicle sales next year. Third-quarter net profit rose 17% year-on-year to $2.2 billion, driven mainly by sources other than vehicle sales. Revenue rose 8% to $25.18 billion.
• General Motors shares surged more than 10% on Tuesday after the carmaker boosted its 2024 adjusted earnings before interest and taxes forecast to at least $14 billion, up from $13 billion previously.
• Boeing workers in the Seattle region decisively rejected the US aerospace giant's latest contract offer, which includes wage increases of 35%, on Wednesday, extending their nearly six-week strike.
• Taiwan Semiconductor Manufacturing Co (TSMC) halted shipments to a customer this month after its semiconductors were sent to Huawei in China, potentially breaching US sanctions, a Taiwanese government official has confirmed.
• Saudi Arabia's revenue from oil exports has slumped to the lowest in more than three years as sluggish demand growth weighs on crude prices. Income from the sale of crude oil and refined products dropped to $17.4 billion in August.
• Seven & i Holdings Co, the operator of 7-Eleven in Japan, aims to increase sales by 70% to over 30 trillion yen ($197 billion) by fiscal 2030, president Ryuichi Isaka said Thursday. It expects to expand store numbers to 100,000 in 30 countries from about 85,000 now.
• Bank of Thailand Governor Sethaput Suthiwartnarueput signalled on Tuesday that policymakers will not be rushing to follow up on a surprise interest-rate cut earlier this month. He also defended the current inflation target, amid government calls to cut rates further and lift the price goal.
• Kasikornbank (KBANK) and Siam Commercial Bank (SCB) have led the way in cutting interest rates by 12-25 basis points after the Bank of Thailand cut its policy rate earlier this month.
• The US chip design firm Nvidia Corp will announce an investment in Thailand when CEO Jensen Huang visits Bangkok in December, Commerce Minister Pichai Naripthaphan said on Monday. Nvidia would join other big tech names including Google and Microsoft, which are building AI data centres in the country.
• Investment in data centres in Thailand has the potential to grow 15%, making it the third-largest industry in Southeast Asia, if the government provides more attractive incentives and enhances infrastructure, according to the property consultant Colliers Thailand.
• The IMF has revised down Thailand's GDP growth forecasts for this year and next by 0.1 points, to 2.8% this year and 3.0% in 2025. That trails other Southeast Asian economies, with Vietnam setting the pace at 6.0% this year.
• Applications for investment promotion rose 42% year-on-year in the first nine months to 722.5 billion baht ($21.7 billion), the highest since 2015, the Board of Investment said on Tuesday.
• Domestic vehicle production fell more steeply in September with a 25.5% year-on-year drop, compared with a 20.6% decline in August, the Federation of Thai Industries said on Thursday. Sales dropped 37.1% to 117,000 units as exports were down 10.8%.
• Electricity Generating Plc (EGCO) has sold its entire 49% stake in RISEC Holding, the operator of a combined-cycle power plant in the US state of Rhode Island.
• Energy Minister Pirapan Salirathavibhaga has demanded changes to the rules for bidding in the second phase of the Energy Regulatory Commission's 3,600MW green energy programme. Bidders that lost out in the first round are allowed to enter the second, and this could lead to favouritism, the minister said.
• The Office of Agricultural Economics has revised its 2024 agricultural economic growth forecast to between -0.8% and 0.2% due to El Niño pressure in first half of the year and recent floods.
• Collection of a 300-baht travel tax may start with air passengers in the first phase, with the system needing at least six months to develop, according to the Ministry of Tourism and Sports.
• The Government Housing Bank reports the real estate developer confidence index for Bangkok and surrounding areas in the third quarter dropped to 45.1, the seventh quarterly decline.
• The Condominium Association warns of a potential domino effect in real estate after third-quarter sales declined, with condo sales seeing contractions of up to 60% from a year earlier. It has urged the Bank of Thailand to relax loan to value (LTV) rules to attract wealthy buyers and investors.
• The Thai Retailers Association has proposed bringing back the "Shop Dee Mee Khuen" (shop and get a tax refund) campaign, suggesting a tax deduction of up to 50,000 baht to stimulate year-end spending.
• Advanced Info Service (ADVANC) aims to lift household subscribers of its fixed broadband internet service to 5.3 million by the end of 2025, from 4.9 million in June this year.

COMING UP: On Tuesday, the US updates consumer confidence, labor turnover, trade balance and retail inventories. On Wednesday, Germany and the US announce quarterly GDP, the UK releases its autumn forecast, and China releases manufacturing PMI. Thursday brings euro zone inflation, US core personal consumption expenditure. On Friday, the US announces October non-farm payrolls and unemployment figures.

• Locally, Lenovo will launch the latest AI PCs on Tuesday. DigiTech ASEAN Thailand 2024 & AI Connect 2024 will open on Thursday.

STOCKS TO WATCH: KGI Securities says the market is giving more weight to the chance that Donald Trump will win the US election. This raises fears that highly protectionist policies will push the US economy into a hard landing.

• The SET Index has limited upside after rising strongly for a while, the brokerage adds, advising investors to focus on defensive investment until the US election results are known. Industrial estates, power plants and defensive stocks are suitable, among them AMATA, WHA, GPSC and BH.
• Asia Plus Securities recommends stocks that are likely to attract positive sentiment from the US election and whose prices are likely to outperform the market, including industrial estate operators AMATA, WHA, PIN and WHAUP. Other recommendations are in the technology group, namely INSET, AIT and ICN; shipping (RCL, PSL and TTA) and commodity stocks (PTTEP and BANPU).

TECHNICAL VIEW: Asia Plus Securities sees support at 1,440 points and resistance at 1,490. InnovestX Securities sees support at 1,440 and resistance at 1,485.