Markets

Thai stocks may edge up warily ahead of rate meeting

BANGKOK : Thai stocks may see a mild rebound on Wednesday although investors will buy cautiously ahead of a Bank of Thai

Published August 24, 2011 Updated August 24, 2011 04:08am

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By Shoaib Ur Rehman

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Economists polled by Reuters expected the central bank to raise its benchmark rate 25 basis points to 3.50 percent to fight inflation. . But the global economic slowdown is increasing the odds of a pause later in the year.

Moody's Investors Service's downgrade of its rating on Japan's government debt by one notch to Aa3 on Wednesday may add to the global fears but some in the market hope the US Federal Reserve will signal moves to support the struggling US economy later this week.

"Despite hopes for a possible third round of US quantitative easing, worries about the global slowdown are still in the market," broker Ayudhya Securities said in a research note.

The benchmark Thai stock index erased early gains to end almost 1 percent lower at 1,057.28 on Tuesday as profit-taking hit banks, sending leader Bangkok Bank down almost 2 percent.

Foreign investors and domestic institutions led sellers on Tuesday, with a net 3 billion baht ($100 million) and 1.9 billion baht ($64 million) respectively, the exchange said.

By 0227 GMT, the MSCI's broadest index of Asia Pacific shares outside Japan had edged down 0.66 percent, reversing an early gain.

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