Trade war to restrain Thai stocks in Q2

Analysts also pull back on gold outlook

- NUNTAWUN POLKUAMDEE

Thai equities have limited upside in the second quarter amid prolonged global trade tensions, while the gold outlook has turned cautious, according to brokerages.

Pi Securities sees the Thai stock market in a phase with little upside this quarter, following a 13% rebound in the Stock Exchange of Thailand (SET) index from its recent lows. The recovery was supported by positive developments in global trade negotiations, especially the US decision to postpone its tariffs for 90 days.

However, Pi expects these negotiations to be prolonged and inconclusive, similar to the 2018-2019 trade dispute cycles.

Even if some progress is made, the brokerage believes global economic growth will remain constrained due to persistent geopolitical tensions, particularly between the US and major trade partners such as China. The possibility of Washington fully abandoning tariffs on Chinese imports is likely slim, raising concerns over continued disruption in global supply chains, according to Pi.

Equity markets tend to perform well in periods of synchronised economic and earnings growth, which is unlikely in the current environment, the brokerage said in a research note.