Rising bond yield and oil prices

The SET is expected to trade volatilely as higher US Treasury yields and rising crude oil prices pressure risk assets, while new domestic catalysts remain absent. The market is anticipated to selectively focus on stocks with individual positive drivers, such as upstream energy and life insurance plays. Regarding capital flows, foreign investors turned net buyers yesterday following six consecutive sessions of net selling, though close monitoring remains necessary. Key events to track today include the release of US August private payrolls data. Technically, the index is drifting downward, lacking supporting momentum, with overall chart patterns showing no clear reversal signals.

Today's highlight
• Brent crude oil prices rose 4.5% DoD to US$94.52/bbl on concerns that heightened Middle East tensions could disrupt oil supply after the US began strikes on IRGC targets while Russia launched airstrikes in Ukraine. This pushed global bond yields higher. Short-term negative for risk assets on risk-off sentiment, particularly anti-oil stocks, but positive for energy (PTTEP, BCP, TOP, SPRC) and life insurance (BLA, TLI).

• The OFFO increased retail diesel prices by Bt0.75/litre and gasoline by Bt0.60/litre (effective Sep 2), tracking rising global oil prices driven by Middle East conflicts. This is expected to press living costs and household debt burden, near-term negative for retail (CPALL, CPN, CRC) and consumer finance (MTC, SAWAD, TIDLOR).

• European gas prices surged above €70/MWh, their highest since Jan 2023, on fears Europe cannot secure sufficient gas-LNG reserves ahead of winter. Diesel prices also rose to a 4-month high, reflecting multi-region war concerns. Positive for BCP, which operates refineries and holds OKEA in Norway.

• The mobile Cabinet approved Phase 2 of the southern double-track railway, comprising 3 projects totaling ~Bt107bn: Chumphon-Surat Thani, Surat Thani-Hat Yai Junction, and Hat Yai Junction-Padang Besar. Construction is expected to start in 3Q27 to boost logistics and southern economy. Positive sentiment for contractors and construction materials (STECON, CK, SCC).

• Foreign tourist arrivals reached 491,456 last week, down 12% WoW as Chinese and Taiwanese arrivals slowed past the summer peak amid negative geopolitical sentiment. Short-term negative for tourism (AOT, MINT, ERW, CENTEL).

Strategy today
In the near term, we expect the SET to trade sideways. While the market draws domestic support from expectations around continued government economic stimulus measures — including solar rooftop installation subsidies, tourism stimulus scheme, progress on the FY2027 Budget Bill, and clarity on the PDP2026 plan — headwinds persist from slowing fund flows, the prolonged Middle East situation, and hawkish signals from the Fed Chair at Jackson Hole signaling readiness to raise rates to contain inflation. The investment strategy is therefore "Selective Buy".

Trading today
We view the SET as likely to trade sideways. While the market draws support from expectations around domestic economic stimulus measures under consideration, it continues to face headwinds from slowing fund flows, the prolonged Middle East situation, and hawkish signals from the Fed Chair signaling readiness to raise rates to contain inflation. Our investment strategy is therefore "Selective Buy" across 4 trading ideas with specific positives as follows:

1. Policy plays — Stocks positioned to benefit from progress on government economic stimulus measures: Thai Teaw Thai Plus (ERW, CENTEL, AWC, CPALL, CPN); clean energy support measures including solar rooftop initiatives and the PDP2026 outcome (GULF, GPSC, BGRIM, GUNKUL, WHAUP, AMATA, WHA); and accelerated government disbursement ahead of fiscal year-end and the FY2027 Budget Bill (STECON, CK, SCC, SCCC).

2. Consumption plays — Stocks set to benefit from a recovery in purchasing power and an increasingly resilient domestic economy: commerce (CPALL, CRC, CPN, GLOBAL), telecommunications (TRUE), financials (MTC, SAWAD, TIDLOR), and land transport (BEM).

3. Laggard plays — Stocks whose share prices have lagged the broader SET despite 2H26 earnings momentum expected to deliver solid YoY and HoH growth, making them likely targets for speculative rotation: AP, PR9, SAWAD, HMPRO, BDMS, TU, BCH, MTC, TIDLOR.

4. High dividend plays — To generate steady cash flow returns through interim dividend capture, with expected Div. Interim Yield >2%: TTB (XD Sep 7), BCP (XD Sep 7), OR (XD Sep 7), HMPRO (XD Sep 8), KKP (XD Sep 9).

Daily Top Picks
PTTEP: Short-term catalyst from rising crude oil prices following a new round of US strikes on Iran. Meanwhile, gas prices are expected to remain elevated throughout 3Q26. Long term, the company plans to continuously expand natural gas production capacity in the Gulf of Thailand and broaden overseas projects. 2026F core profit is expected to grow 27% YoY. Short-term TP is Bt153.50.

BCH: Supported by signs of revenue recovery in 2H26, with July 2026 revenue growing 7% YoY, accelerating from 1% YoY in 2Q26. Earnings are expected to show a clear recovery in 2027F driven by a rebound in patient volumes. Upside is expected in 4Q26 from an increase in Social Security service fee rates. Short-term TP is Bt11.30.