Mideast conflicts, Europe unrest affect local investor sentiment

Escalating conflicts in the Middle East and spreading political unrest across Europe are weighing on global investment sentiment, leaving Thailand's stock market vulnerable to further volatility in the near term, according to Globlex Securities.

Wilasinee Boonmasungsong, research director at Globlex, expects the Stock Exchange of Thailand (SET) index to move between 1,530 and 1,580 points this week, with the domestic market likely to track weakness in overseas equities.

Geopolitical tensions have intensified following increased Houthi attacks in Saudi Arabia, prompting the US State Department to order non-essential personnel and their families to leave the area.

Reports of potential new US military strikes against Iran, with the US and Israel reportedly planning further action after the US midterm elections, have added to the uncertainty.

Europe is facing pressure as protests over the cost of living and public services spread from France to other countries. According to CNBC, hundreds of thousands of people have taken part in demonstrations, raising concerns about the region's political and economic stability.

A prolonged crisis could weigh on Thai exports by weakening European purchasing power and demand for goods, while also disrupting logistics networks.

Together, these external risks could undermine investor confidence and increase pressure on global equity markets, said Ms Wilasinee.

Despite the uncertain outlook, Globlex predicts domestic infrastructure spending and developments in Thailand's capital market could offer some support.

The Transport Ministry is scheduled to seek cabinet approval for a 5.8-billion-baht central budget allocation to extend the electric train scheme offering fares of 17-45 baht, including a 40-baht all-day fare on the Red and Purple lines, through the end of 2027.

The Bangkok Mass Transit Authority is also preparing public consultations on a project to lease 2,320 electric buses worth more than 23 billion baht, alongside plans to restructure fares.

Meanwhile, the SET expects initial public offerings to regain momentum in 2027 following the IMF-World Bank meetings, supported by fundraising plans involving large companies and funds worth more than 50 billion baht.

Investors are expected to monitor economic data released by the Bank of Thailand after its Monetary Policy Committee meets.

Retail investors are also watching China's September industrial profit along with US indicators including private sector employment, durable goods orders, consumer confidence, new home sales, manufacturing activity, third-quarter GDP and the personal consumption expenditures price index.

In addition to the Federal Reserve's meeting, meetings of the European Central Bank and the Bank of Japan could offer hints to investors.

Globlex recommends selective investment in stocks expected to benefit from government support for residential solar installations, including Gunkul Engineering (GUNKUL), Gulf Development (GULF) and Solartron (SOLAR).