Sideways up but still lacking catalyst

The SET is expected to move sideways-up, supported by the possibility that the Fed will keep interest rates unchanged at this month's meeting following lower-than-expected Nonfarm Payrolls data, alongside lower crude oil prices after the G7 agreed to release emergency diesel reserves. However, domestic factors continue to weigh on sentiment, including foreign investors being net sellers for nine consecutive trading sessions and renewed concerns over a new wave of flooding, which is expected to lead to stock-specific investments with individual catalysts. Domestically today, monitor September inflation report. Technically, the index is seeing a rebound, but intermittent selling pressure persists, keeping the recovery uncertain.

Today's highlights
• The G7 agreed to release emergency crude oil and diesel reserves, a total of 100mn bbl over 4 months. However, the OPEC meeting maintained its production quota, and attacks on two oil tankers in the Strait of Hormuz mean supply bottlenecks remain. Short-term positive for refiners (TOP, SPRC, BCP).

• The Ministry of Interior approved a rooftop solar project worth Bt75bn targeting 1.5mn households. The government will provide a subsidy of Bt50,000/household and buy back excess power up to 5 kW at Bt2.20/unit for 20 years (Net Billing), with registration opening on Nov 1, 2026. Positive for solar equipment distribution and installation providers (GUNKUL, HMPRO, GLOBAL).

• The Cabinet approved accelerated disbursement measures for FY2027 government investment budget of no less than 75% out of a total budget framework of Bt4.31tn, alongside approving an investment framework of Bt1.4tn for 46 state enterprises. Positive for adding backlog to construction contractors (CK, STECON).

• The Cabinet resolved to open registration for flood relief, providing subsidies of Bt5,000–9,000/household, with over 850,000 applicants registered. Meanwhile, the Finance Minister estimates the flood impact on GDP is limited to under 0.1%, maintaining this year's growth target at 2.0–2.5%. Positive for building material retailers (GLOBAL, HMPRO, DCC).

• The PM discussed with Airbus executives to push for investment in Sustainable Aviation Fuel (SAF) and establish a Center of Excellence in Thailand, along with expanding space and aviation cooperation to upgrade high-skilled labor, reinforcing concrete goals to drive Thailand into a regional aviation hub. Long-term positive for aviation and airport sectors (AOT, THAI).

Strategy today
In the near term, the SET is expected to remain volatile due to lack of new supporting factors amid investment atmosphere pressured by multiple headwinds including the Fed's hawkish stance supporting bond yields at multi-year highs causing continued fund outflows, combined with elevated energy prices from prolonged geopolitical issues posing inflation risks. Domestically, overhang from flooding concerns remains, with preliminary impact on the economy assessed as limited, but caution warranted on sudden flooding risks from expected heavy rain Oct 5-7 and Oct 11-13, which could add downside risk to the economy and create negative market sentiment. The investment strategy therefore recommends "Selective Buy".

Trading today
The SET is expected to remain volatile, lacking new supporting factors, pressured externally by the Fed's hawkish stance pushing bond yields higher causing fund outflows, and high energy prices from geopolitical issues increasing inflation risks. Domestically, overhang from monitoring new flooding waves which may add downside risk to the economy and dampen investment sentiment. The investment strategy therefore recommends "Selective Buy" emphasizing "Buy on Dip" through 3 trading themes with specific positive factors as follows:

1. Domestic Play — Based primarily on domestic consumption with stable revenue streams and high resilience to external factors. Includes retail stocks (CPALL, CPN, CRC), healthcare stocks (BCH, PR9), and telecom stocks (TRUE).

2. Flood Defensive & Recovery Plays — Benefit from flooding starting with emergency essential goods buying (CPALL, BJC, CRC) continuing to post-flood housing repair demand (HMPRO, GLOBAL) and construction materials (DCC). Recommend avoiding or delaying investment in property/casualty insurance stocks that may face pressure from higher loss ratios.

3. Tourism & Mega-Event Play — Expected to benefit from entering 4Q26 high tourism season supported by China's Golden Week (Oct 1-7) and global events like World Bank-IMF meetings (Oct 12-18). Includes tourism stocks (ERW, CENTEL, AOT) and retail stocks (CPALL, CPN, CRC).

Daily Top Picks
GLOBAL: Short-term catalyst from decreasing rainfall and readiness to handle subsequent situations, supporting the start of home repairs. 2H26 earnings are expected to grow YoY, driven by gross profit margin expansion and manageable SG&A-to-sales. 2026F profit is projected to grow 35% YoY. Short-term TP is Bt6.80.

KCE: Short-term catalyst from upward momentum in global tech stocks and a weakening baht trend supporting export revenues. 2H26 earnings are expected to continue growing YoY, underpinned by selling price increases of ~10–12% and HDI capacity expansion to support high demand. Short-term TP is Bt77.75.