Tisco ESU prescribes cautious approach

Investors should exercise caution as global stock markets are showing early signs of fatigue after a strong rebound, driven largely by short-term optimism surrounding trade talks, says Tisco Economic Strategy Unit (ESU).

- NUNTAWUN POLKUAMDEE BOONSONG LIPIMAS

Structural risks persist and could weigh on market sentiment in the second half of the year, said the think tank, which recommends investors gradually lock in profits, especially in cyclical sectors such as consumer discretionary, which are more sensitive to economic downturns.

Global equities have returned to levels last recorded during the US tariff announcement following a rally supported by progress in trade negotiations between the US, China and the UK, said strategist Thanathat Srisawast.

However, he said these developments are temporary tailwinds, while broader structural risks including geopolitical tensions and trade policy uncertainty are likely to intensify in the second half of the year.

A key concern is stock valuation. While recent trade talks have delivered some positive headlines, significant hurdles remain, said Mr Thanathat.

The US is maintaining a minimum tariff floor of 10%, even for close allies such as the UK.

Meanwhile, China's temporary tariff relief from 145% to 30% remains steep until a final resolution is reached, he said.

US President Donald Trump also signalled potential tariff hikes to 50% on EU imports should trade negotiations stall, then paused those threats over the holiday weekend in America.