Trump tariff tsunami sinks regional shares

RECAP: Asian shares fell to their lowest level in two months yesterday, extending a global selloff in stocks after US President Donald Trump's latest tariff measures drove investors into safe-haven assets.

The Thai index plunged 3.15% ahead of the three-day weekend. Heavyweight energy and banking stocks led the decline.

The SET index moved in a range of 1,122.51 and 1,176.84 points this week, before closing yesterday at 1,125.21, down 4.3% from the previous week, with daily turnover averaging 40.74 billion baht.

Retail investors were net buyers of 7.22 billion baht. Institutional investors were net sellers of 5.35 billion baht, followed by brokerage firms at 1.29 billion and foreign investors at 572.71 million.

NEWSMAKERS: President Trump signed an order to impose reciprocal tariffs on around 60 countries at varying rates, among them China 34%, EU 20%, Japan 24%, Vietnam 46% and Thailand 36%, effective April 9. A universal base rate of 10% will be applied to countries not listed, effective April 5.

• Bloomberg Economics calculates that the effective tax rate the US now charges on more than $3 trillion of imported goods may climb to 23% -- higher than at any point in more than a century.
• A global selloff in bank shares turned ominous with a collapse in Japanese bank stocks on Friday to their worst weekly loss in 40 years while US and European lenders continued to decline, as fear of a global recession swept markets.
• The Atlanta Fed forecast US first-quarter GDP contracting by 2.8% from the previous year. The economy grew at a 2.3% pace in the fourth quarter.
• China vowed to retaliate against Trump's biggest tariffs yet, putting the world's largest economies on a collision course that risks decimating bilateral trade and upending supply chains.
• Apple shares fell more than 9% in response to Trump's tariff plan, as China is a major part of its global supply chain.
• WTO chief Ngozi Okonjo-Iweala forecast a contraction of around 1% in global merchandise trade volume this year as a result of the tariffs. IMF managing director Kristalina Georgieva warned of "a significant risk to the global outlook at a time of sluggish growth".
• A Bloomberg gauge of the dollar dropped by the most since its launch in 2005 amid fears that tariffs will batter the US economy.
• Oil prices sank to the lowest in more than three years as traders digested a surprise output increase by Opec+ and potentially demand-sapping US tariffs. Global benchmark Brent lost more than 10% in two days.
• Eight Opec+ countries agreed on Thursday to advance their plan for oil output increases, lifting production by 411,000 barrels per day in May, about three times the amount planned earlier.
• Indian shares fell on Thursday after the US imposed 26% reciprocal tariffs, but a surge in pharma companies, which are exempt from the duties, helped cushion the blow.
• The Chinese smartphone and electronics giant Huawei said profits fell 28% last year as it faced international economic uncertainty and weak consumption at home.
• Fitch has downgraded China's credit rating to A, saying the government deficit is poised to rise to 8.4% of GDP in 2025, from 6.5% in 2024.
• Euro zone inflation has eased further towards the European Central Bank's 2% target as officials weigh whether or not to continue lowering interest rates.
• Japan's household spending declined 0.5% in February from a year earlier, the first decline in three months, as inflation remained elevated, in a sign of vulnerability in a key part of the economy.
• Tesla's vehicle sales fell 13% last quarter to an almost three-year low, as the carmaker dealt with international backlash against Elon Musk and the outsize role he is playing in the Trump administration.
• Nissan Motor said it would halt new orders of Mexican-built Infiniti SUVs for the US market after new auto tariffs imposed by Trump took effect.
• Trump threatened 25-50% tariffs on countries purchasing oil from Russia if he believes Russia is obstructing efforts to end the war in Ukraine.
• The University of Michigan reported the US consumer confidence index for March fell to 57.0, the lowest since July 2022.
• China's manufacturing purchasing managers' index (PMI) improved to 50.5 in March, staying in expansion territory for a second consecutive month and hitting a one-year high.
• The Japanese conglomerate Marubeni Corporation is absorbing Sumitomo Pharma's operations in Asia to create a new company under a share purchase agreement worth 72 billion yen ($480 million).
• Stiff US tariffs could cut Thailand's economic growth by one percentage point from earlier forecasts, Finance Minister Pichai Chunhavajira said on Thursday.
• The University of the Thai Chamber of Commerce (UTCC) said the US reciprocal tariffs could result in economic losses for Thailand of 359 billion baht, reducing GDP by 1.93%.
• The Federation of Thai Industries said new US import taxes on all vehicles not produced in the US, starting from a base rate of 2.5% up to a maximum of 25%, would cut Thailand's exports by 10%.
• The 36% reciprocal tariff on Thailand was much higher than the maximum rate of 25% that Thai businesses expected, Thai Chamber of Commerce chairman Poj Aramwattananont said. But he urged people not to panic as other countries are also facing higher tariffs.
• SCB Economic Intelligence Center and Kasikorn Research Centre expect the March 28 earthquake to result in Thai economic losses of 20-30 billion baht over the coming months.
• The recent earthquake could result in fewer Thais travelling abroad over Songkran, as they have heightened concerns about repair costs for damaged property, says the Thai unit of the French insurer AXA.
• The Ministry of Finance is preparing post-earthquake relief and stimulus measures for the real estate sector to restore confidence, including a cut in transfer and mortgage registration fees to 0.01%.
• UTCC predicts that consumer spending over the Songkran holiday would hit 134.6 billion baht, up 4.5% from last year and the highest since 2020.
• Tourists rushed to cancel 1,100 bookings following the recent earthquake, the Thai Hotels Association (THA) said. Songkran is expected to bring back 90-95% of tourists before a full recovery in the third quarter.
• Thailand and India have signed a strategic partnership, vowing to cooperate on defence and accelerate a key infrastructure project to link the India and Southeast Asia.
• The cabinet approved a 4% reduction in electricity tariffs for the May-August period to 3.99 baht a unit, from 4.15 baht now. The final decision rests with the Energy Regulatory Commission.
• The Office of Industrial Economics said the February manufacturing production index (MPI) was 96.18, contracting 3.9% year-on-year with a capacity utilisation rate of 59%, reflecting global economic uncertainties and high household debt levels that are slowing consumption.
• Gulf Energy Development (GULF) resumed trading in the market on Thursday after completing its merger with Intouch Holdings (INTUCH). Tris Rating has upgraded the firm's corporate credit rating from A+ to AA-.
• Central Restaurants Group (CRG) plans to open 120-140 new branches this year. The restaurant industry in Thailand is expected to be valued at 572 billion baht, rising 5-7% from 2024.

COMING UP: On Monday, the US releases consumer credit data and Germany announces trade figures. On Tuesday, the Reserve Bank of New Zealand holds an interest rate meeting. On Wednesday, China reports monthly consumer and producer prices. On Thursday, the US reports core inflation and initial jobless claims. On Friday, the UK releases a GDP update, Germany reports consumer prices and the US updates producer prices.

• Locally, the Stock Exchange of Thailand on Wednesday discusses March trading figures.

STOCKS TO WATCH: Asia Plus Securities is monitoring the impact of US tariffs on Thai agri-food businesses, notably ITC, the Thai Union pet food subsidiary. About half of its revenue in 2024 was from the US and the current import tariff for its products is zero. While parent TU derives 39% of its revenue from the US, more than a quarter of that comes from US production bases. Canned tuna faces a tariff of 12%. CPF and GPFT, major chicken and pork processors, are expected to be less affected because they do not directly export to the US.

• The most affected electronics makers are DELTA and KCE, which derived 26% and 20% of their sales from the US in 2024, respectively.
• For short-term investment, Asia Plus recommends domestic plays such as OSP, CBG, ICHI, CPALL, HMPRO, CRC, MTC, TIDLOR and SAWAD, and cautions investors to avoid export-oriented firms, especially those tied to US sales.
• Tisco Bank expects central banks around the world will have the opportunity to further cut interest rates as the economy slows down. That will have a positive effect on global bond prices and REITs. For investors with high risk tolerance, it recommends gradually accumulating Indian, Japanese and Chinese stocks because valuations are starting to look attractive.

TECHNICAL VIEW: Yuanta Securities Thailand sees support at 1,120 points and resistance at 1,150. InnovestX Securities sees support at 1,110 and resistance at 1,170.