PATTAYA, Thailand – The Thai stock market remains in a risk-on environment but is showing increasing signs of caution as global financial conditions turn more volatile, according to market strategist Piriyaphon Kongwanich from Bualuang Wealth Research. He said short-term sentiment is being weighed down by profit-taking in US technology and semiconductor shares, which had previously rallied strongly. The pressure was intensified after investor disappointment over artificial intelligence revenue expectations from Broadcom, triggering a broader pullback in high-growth tech stocks.
At the same time, stronger-than-expected US nonfarm payroll data has pushed US Treasury yields higher, reinforcing concerns that interest rates may remain elevated for longer or potentially rise further. This environment is expected to create near-term headwinds for Thai electronics and export-related sectors. Despite this, he noted that global geopolitical developments are providing some support to risk assets. Ongoing negotiations between the United States and Iran continue to sustain expectations of de-escalation in geopolitical tensions, helping to underpin broader market sentiment and encouraging rotation across sectors.
Within the Thai equity market, this rotation is increasingly visible as investors shift away from previously strong-performing sectors toward laggard groups with recovery potential. These include retail stocks, small power producers, healthcare operators focused on foreign patients, and tourism-related companies. The tourism and hospitality sector in particular is showing signs of gradual recovery, with revenue per available room expected to return to positive year-on-year growth in the second quarter of 2026, supported by a low base effect from the previous year. Chinese tourist arrivals are also showing month-on-month improvement, with further upside expected during China’s summer holiday season in July and August.
Meanwhile, dividend-focused stocks, especially large banks, are attracting renewed attention as investors position ahead of seasonal XD dates. Historical patterns suggest Thai banking stocks tend to perform strongly during July and August, supported by dividend expectations and improved investor positioning. He added that net interest margins in the banking sector are expected to stabilize after nearing a bottom in the second quarter of 2026, while wealth management income continues to grow alongside rising assets under management. Overall, the strategist described the market as still fundamentally supportive but increasingly sensitive to global macroeconomic shifts, with sector rotation likely to remain the dominant theme in the near term.
