Investors take profits, watch Mideast warily

RECAP: Asian share markets retreated yesterday as investors took profits on technology stocks and turned defensive ahead of the weekend, wary of a flare-up in Middle East hostilities with US-Iran peace talks in limbo.

The Thai index pulled back on Friday after surpassing 1,600 points on Thursday amid persisting uncertainties in the Middle East, while profit-taking in global tech weighed on sentiment.

The SET index moved in a range of 1,567.00 and 1,607.25 points this week, before closing yesterday at 1,582.60, up 0.9% from the previous week, with daily turnover averaging 79.67 billion baht.

NEWSMAKERS: The US on Tuesday announced new tariffs of 10% to 12.5% on the EU and 59 countries, including Thailand, accounting for almost all of the latter's imports, over concerns trading partners are not doing enough to tackle forced labour. The new rates could replace the current Section 122 tariffs that expire on July 24 but consultations are ongoing.

• The SpaceX hype rocket has lifted off, with bankers holding roadshows for an IPO that could raise $75 billion, valuing the rocket, satellite and AI company at $1.8 trillion and making founder Elon Musk a trillionaire. Musk insists the price of $135 each for the 555 million shares cannot be lowered.
• The SpaceX IPO opens on June 12 with trading to begin later this month on the Nasdaq -- but not on the S&P 500. S&P Dow Jones said it would not change its rules, which require a company to be profitable in its most recent quarter and the preceding four quarters combined. SpaceX reported a $4.94-billion net loss in 2025.
• The US manufacturing index rose in May to a four-year high of 54 points, driven by front-loading of orders amid rising prices and shortages arising from the Mideast war.
• Euro zone inflation rose to 3.2% in May, driven by high energy prices, reinforcing expectations that the European Central Bank will raise rates next week.
• The world's excess steel capacity reached 640 million tonnes last year and is expected to rise to 745 million tonnes by 2028, the OECD said on Thursday, as Chinese production subsidies persist while the Mideast war has dented demand.
• Britain's new car sales rose 7.1% ‌ to 160,662 vehicles in May, the best month since 2019, on resilient demand, especially for EVs, which accounted for 27% of the total.
• Taiwan's Foxconn has announced a collaboration with US-based Intel to jointly develop and ‌deploy next-generation AI infrastructure and intelligent computing.
• China's SAIC Motor plans to set up a car factory in Spain, its first production facility in the European Union, with an initial investment of around €200 million.
• The Japanese automaker Nissan is considering building cars for the Chinese manufacturer Chery, which produces the Omoda and Jaecoo brands, at the Nissan plant in Sunderland in northeastern England.
• Goldman Sachs has raised its 12-month target for MSCI emerging markets index to 2,000 from 1,850, citing AI-driven earnings growth. The revision implies a 12% upside from its last close of 1,787.88.
• Indonesia has placed ‌exports of strategic commodities -- palm oil, coal and ferro alloys -- under the control of a new state-owned entity, Danantara Sumberdaya Indonesia (DSI). The goal is to increase state revenue, prevent under-invoicing and secure foreign exchange earnings.
• Malaysia's suspension of Thai shrimp imports because of concerns over chemical residues took effect on June 1, targeting five species and putting 4 billion baht in annual export revenue at risk.
• Thailand's headline inflation in May rose less than expected, by 2.79% from a year earlier, easing from 2.89% in ‌April, the Ministry of Commerce said. Core CPI, which excludes energy and fresh food prices, rose by 0.9%.
• The Bank of Thailand expects headline inflation to peak at 5.2% in October this year, with a full-year average of 3.0%, driven by rising oil imports and government subsidies, governor Vitai Ratanakorn said on Tuesday.
• The central bank has announced standardised service fee guidelines for commercial banks and cut several fee categories to support the general public and small businesses. Impact on banks is expected to be limited as they have shifted focus toward growth in wealth management and bancassurance.
• Thailand could be at risk of a "dual deficit", with longer-term baht weakness, Kiatnakin Phatra Financial Group warned, calling on authorities to emphasise economic stability while strengthening the country's long-term economic resilience.
• Registration for the government's "Thais Help Thais Plus 60/40" co-payment scheme closed nearly four million places short of its 30-million target, but officials reported encouraging first-day spending of more than one billion baht on June 1.
• Registration of low-income earners to receive a 4,000-baht subsidy via the welfare card opened on Thursday, with 13.2 million people entitled to join, implying about 53 billion baht of consumption spending from June to September.
• Thailand's hard disk drive (HDD) exports to the Middle East are expected to contract by 18% to around $79 million in 2026 as the Iran conflict disrupts maritime shipping, according to Kasikorn Research Centre.
• The Public Debt Management Office has launched a monthly savings bond scheme aimed at making government-backed investment more accessible to retail investors. Two billion baht worth of "Savings Plus" (Aom Plus) bonds will be offered each month, with a minimum purchase of 1,000 baht per unit.
• The Bank of Thailand is preparing to increase oversight of cash deposits and exchanges of 5 million baht and above, requiring disclosure of the source and purpose of funds to deter illicit transactions.
• The Tourism Authority of Thailand (TAT) is preparing to revise its 2026 foreign arrivals target upward. Arrivals are now expected to decline by only 1-2%, or potentially return to positive growth, compared with previous concerns about 5-10% contraction from last year's total of 33 million, governor Thapanee Kiatphaibool said.

COMING UP: On Monday, Japan releases GDP and bank lending data. On Tuesday, South Korea announces GDP, China and the US report trade data, and the US releases existing home sales. On Wednesday, China and the US report inflation. On Thursday, the US announces producer prices and jobless claims. On Friday, Japan reports industrial production, the UK releases GDP and trade figures, and the US announces inflation expectations data.

• Locally, InsureX (formerly SCB Protect) will discuss its business plan, growth strategy and key initiatives for the coming year.

STOCKS TO WATCH: InnovestX Securities expects positive sentiment for Thai equities next week, supported by strong participation in the "Thai Chuay Thai Plus" consumption stimulus and easing geopolitical tensions. However, stretched valuations and potential profit-taking in global technology stocks could limit the upside. The brokerage recommends OR, TIDLOR and TRUE.

• Kiatnakin Phatra Securities believes Thailand's upcoming Power Development Plan could unlock 1 trillion baht in clean energy and smart-grid investments, driven by long-term EV and data centre demand. It sees power, construction, industrial estate and banking stocks as key beneficiaries, with GULF, STECON and KTB as top picks.

TECHNICAL VIEW: Krungsri Securities sees support at 1,560 points and resistance at 1,610. InnovestX Securities sees support at 1,560 and resistance at 1,625.