SET seen as having little room for upward movement

A stock analyst at Krungsri Securities expected the index to fall between 1,395 and 1,400, before rebounding, due to lack of new positive sentiment to stimulate investment, while investors would hold off on trading to follow developments in the US Federal Open Market Committee (FOMC) meeting.
“Investors expect the FOMC to maintain the interest rate at 0-0.25 per cent and unlimited quantitative easing,” the analyst said.
“Meanwhile, we have to also keep an eye on the US Federal Reserve’s announcement on signs of a US economic recovery after the lockdown relaxation.”
The analyst added that the index would be under pressure from tight valuation as the index’s price-to-earnings ratio is more than 20 times.
He recommended investors buy:
▪ Stocks that would be added to the SET50 and SET100 calculation, such as BPP, TTW, ACE, DOHOME, RBF, SIRI, SISB, TVO and WHAUP.
▪ Stocks whose second-quarter performance will improve, such as CKP, TASCO, STA and RS.
▪ Defensive stocks, such as INTUCH, TTW and DIF.
The SET Index on Tuesday dropped sharply by 30.29 points or 2.11 per cent, closing at 1,408.37 as investors sold stocks due to tight valuation. The total transaction volume was Bt115.559 billion.
Foreign investors made net buy of Bt486 million in stocks, but made net sales of Bt4.975 billion in the bond market. There were 5,301 Net Long TFEX SET50 contracts.