The Stock Exchange of Thailand (SET) index risks falling below 1,300 points after testing a low of 1,335 on Tuesday, as oil-related stocks continue to drag down the bourse, while banking stocks may be affected by the Cyber Security Act, say analysts.
The Thai bourse posted 1,342.96 points at midday on Wednesday, slightly down from Tuesday's close of 1,345.77, as focus turns to the US Federal Reserve's interest rate decision and the earnings of listed American large-cap companies.
Shares of energy conglomerate PTT lost 0.81% to 30.75 baht, while PTT Global Chemical (PTTGC) dipped 1.35% to 21.90 baht. PTT Oil and Retail Business (OR) declined 1.68% to 11.70 baht.
Suchet Suktae, deputy managing director of ASL Securities, said oil stocks plummeted after US President Donald Trump demanded Opec lower oil prices as Trump promotes domestic oil production.
"We see the SET's key support level at 1,330 points for now. If the index falls below that range, we might see it slipping below 1,300," said Mr Suchet.
Pakavat Pisuthipan, deputy head of retail services and head of securities at CGS International Securities (Thailand), shared a similar view, with the brokerage highlighting 1,320 points as the current support level.
"If the SET index cannot resist at 1,320 points, we see a possibility of it testing 1,300 points, depending on actions and reactions from Trump on taxes and rates," he said.
The results of the year's first Federal Open Market Committee meeting are slated to be announced early this morning, and the market expects there is a 99% likelihood the Fed will maintain its current rate at 4.25%-4.5%.
Kitpon Praipaisarnkit, vice-president of UOB Kay Hian Securities Thailand, said if the Fed maintains US policy rates as widely expected, investors would look for clues from the central bank about potential cuts in the future.
"If the Fed sends a clear signal that monetary policy will be tightened, the US dollar will gain strength," he said.
"That could prompt investors to further dump Thai stocks."
Analysts also expect banking and telecom stocks to be negatively affected by the Cyber Security Act, which was endorsed by the cabinet on Tuesday.
Proposed by the Digital Economy and Society Ministry, the new law holds banks, phone operators and social media owners responsible for damage from call centre scams if they are found to be negligent or reckless.
Shares of Advanced Info Service (ADVANC) fell 1.39% on Wednesday afternoon to 284 baht, while Kasikornbank (KBANK) shed 0.62% to 160 baht.
