The SET is expected to pull back, pressured by rising crude oil prices as supply concerns resurface. Meanwhile, US 10-year and 30-year Treasury yields surged to touch their highest levels in 24 years. However, energy, insurance, and banking stocks are expected to outperform the market. Fund flows remain unclear, even as foreign investors ended an 11-day net selling streak in Thai equities. Technically, the index failed to break above its 75-day moving average, raising caution over a potential pull back to consolidate.
Markets
Range-bound as tension returns
Today's highlights
• The 10-year US Treasury yield rose to 5.31%, reaching its highest level since 2002 after a New York Fed survey showed 1-year inflation expectations accelerated to 3.9%, the highest since May 2023. This reinforces risks of interest rates remaining higher for longer. Short-term negative for global risk assets, but positive for insurance (BLA, TLI) and banking (KTB, BBL, KKP).
• Iran threatened to close illegal shipping routes, while the Houthis launched an attack on Aden Airport. Tropical Storm Isaias may intensify into a hurricane, threatening oil production in the Gulf of Mexico (estimated supply loss of 11.2mn bbl). This supports crude prices and GRMs, positive for energy (PTTEP, TOP, SPRC, BCP).
• Toyota temporarily suspended production at 3 factories, leaving 30,000 units in backlogged production after 14 suppliers were flooded, with recovery expected to take 3–4 weeks; negative for auto (SAT, STANLY). The Ministry of Agriculture and Cooperatives reported 1.7mn rai of damaged farmland; negative for consumer finance (MTC, SAWAD, TIDLOR).
• The Finance Minister revealed the "BOI to IPO" program will feature a Super-Fast Track route to facilitate foreign companies listing on the SET. Discussions were also held with JETRO, targeting Japanese firms as first-mover participants, underscoring Thailand's position as a relocation hub for future industries; long-term positive for the SET and industrial estates (AMATA, WHA).
• SCC announced plans for a JV between subsidiaries SCGC and PTTGC, with clarity expected on Oct 29, 2026. Although post-restructure revenue may decrease, net profit, cash flow, and EBITDA should improve significantly; long-term positive for SCC and PTTGC.
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 (CPN, CRC), healthcare stocks (BCH, PR9), and telecom stocks (TRUE).
2. Flood Defensive & Recovery Plays — Benefit from flooding starting with emergency essential goods buying (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 (CPN, CRC).
Daily Top Picks
CPN: Short-term catalyst from expectations of limited impact from the flood crisis on operating performance. 3Q26F normal profit is expected to grow YoY and QoQ, supported by continuous growth in shopping mall foot traffic and tenant sales, along with upside potential from title transfers at the Dusit Residences project. Short-term TP is Bt63.50.
SPRC: Short-term catalyst from renewed escalation of Middle East tensions as Iran threatens to close shipping routes, alongside China declaring an indefinite suspension of refined oil product exports, putting heavy pressure on the refined oil supply chain. Meanwhile, Saudi Arabia cut its crude export prices to Asia for November delivery to a 6-year low. Short-term TP is Bt16.70.