SET Index slides on worries of recession

A stock analyst at Krungsri Securities expected the index to fluctuate between 1,245 and 1,270 as the number of new Covid-19 cases in many countries, such as the US, Europe, and Thailand, tended to slow down.
“Meanwhile, investors hope that governments worldwide would ease lockdown measures, which will be a positive sentiment for investment and economic conditions,” the stock analyst said.
“However, uncertainty following the economic recession, including the decline in listed companies’ revenue and profits would pressure the index.”
The analyst said that the International Monetary Fund (IMF) has cut the global gross domestic product (GDP) forecast this year to 3 per cent contraction and a 6.7 per cent contraction of Thailand's GDP due to the Covid-19 situation, which is considered the worst financial crisis since the Great Depression of the 1930s.
“In addition, crude oil price dropped due to uncertainty following a decline in demand, which would be a negative sentiment for energy stocks, as well as pressure the index to fluctuate.”
The analyst recommended that investors make selective buys from three groups of stocks:
● Retail, tourism and hotel stocks that benefit from a decline in the number of Covid-19 patients in Thailand, such as CRC, HMPro, Global, Com7, AOT, Centel, Mint and ERW.
● ICT and food stocks that have escaped the severe impact from the outbreak, such as ADVANC, INTUCH, DTAC and CPF.
● Defensive stocks with consistent income and pay high dividends, such as TTW and BCPG.