Tech sell-off and Binance hack rattle investors

RECAP: Stock markets sank on Friday and bonds surged amid a tech-led sell-off, as investors grow pessimistic about the returns on massive AI investments. The record theft of $6.3 billion from the crypto platform Binance further rattled investors' nerves.

The SET index moved in a range of 1,511.58 and 1,586.61 points this week, before closing on Friday at 1,518.59, down 2.69% from the previous week, with daily turnover averaging 69.93 billion baht.

NEWSMAKERS: US GDP grew 3.4% in the third quarter, beating the 3.2% forecast, with consumption up 3.8% and equipment investment surging 20.9%, driven by AI. September personal consumption expenditure, the Federal Reserve's preferred inflation gauge, rose to 3.6% year-on-year, keeping a December rate increase in focus.

The Wall Street Journal reported that the US had told Gulf states to prepare for possible military action against Iran after Tuesday's midterm elections. Brent crude is trading above $115 per barrel, as investors weigh threats to oil production and shipping.

The Fed left interest rates unchanged as expected, upgrading its economic assessment to "solid" while acknowledging persistent inflation. Two of the 12 members voted for a 25-basis-point hike, while chairman Kevin Warsh reaffirmed readiness to act.

The European Central Bank held its policy rate at 2.5% but warned of rising inflation risks from energy costs, keeping a December rate hike in play. President Christine Lagarde announced she would step down in February, eight months ahead of schedule, amid speculation that she might play a role in the high-stakes French election.

The Bank of Canada raised its policy rate by 25 basis points to 2.50%, its first increase in more than three years, citing energy-driven inflation.

Voters in 10 US states on Tuesday will consider 41 measures restricting data centres because of electricity, water and health concerns. Norway expects data centre power demand to rise from 3-4 terawatt-hours to 25TWh by 2035, potentially increasing connection costs and permit hurdles.

North Korean hackers were behind ‌the $6.3-billion theft from Binance, according to the US blockchain analysis firm TRM Labs. The world's largest crypto exchange said it would "cover all losses". Local affiliate Binance TH said it operates as a separate, locally licensed platform but was monitoring developments and assessing any potential implications.

Microsoft said third-quarter revenue of its Azure cloud business grew 48% to $33.2 billion, with free cash flow of $18.6 billion, despite $45.2 billion in capital expenditure. Alphabet said its Google Cloud revenue doubled to $30.7 billion, but free cash flow turned negative at $9.07 billion.

The South Korean chip giant SK hynix reported a 632% surge in third-quarter operating profit, fuelled by booming demand for AI semiconductors. Net profit jumped 216% to 40 trillion won ($30 billion).

Boeing delayed its target of producing forth-seven 737 aircraft monthly until early 2027 and expects to miss this year's delivery target. Free cash flow next year is forecast at $3 billion, below the $5.5-billion market estimate, while its $10-billion target has shifted to 2029. Shares fell nearly 10%.

Meta plans to raise up to $95 billion for AI infrastructure through a $35-billion initial offering and an at-the-market programme of up to $60 billion. Nvidia, AMD and Broadcom are reportedly interested in buying up to $5 billion, raising concerns over shareholder dilution and circular financing.

Bank of America, Citi, Morgan Stanley and Blackstone are arranging $63 billion in financing to buy Broadcom AI chips and networking equipment for lease to Anthropic from 2027. Broadcom will support residual values, highlighting strong AI demand but raising circular financing and debt risks.

Anthropic has filed for a potential Nasdaq IPO that could raise up to $100 billion at a valuation of up to $2 trillion. It reported first-half 2026 revenue of $16 billion, while a net loss of $80.7 billion was largely attributed to one-off accounting items. The company also flagged AI risks and reliance on Amazon, Google and Microsoft.

Brazil's Bovespa plunged 13.9%, its biggest fall since March 2020, while the real weakened 8.1% after the election victory by incumbent Luiz Inácio Lula da Silva raised concerns over fiscal discipline.

The Thai Board of Investment reported investment applications worth 1.7 trillion baht in the first nine months of 2026, up 28% year-on-year. Digital industries accounted for 70%, while foreign direct investment applications rose 62% to 1.55 trillion baht, mainly in digital infrastructure.

Thailand's Data Centre Board will propose minimum electricity security, water and environmental standards to the cabinet as clearer industry regulation takes shape. Projects will be classified into seven levels by power consumption; 83 existing projects will have one year to comply, while 100 new projects will face stricter rules. Regulations are targeted for completion within 8-12 months.

The Bank of Thailand's Monetary Policy Committee unanimously maintained the policy rate at 1.00% on Oct 28, to support a sustainable economic recovery.

The cabinet approved excise tax cuts of 5.60 baht per litre for E20 petrol and 5.50 baht for B20 diesel, effective until Jan 27, to ease fuel costs and household expenses.

The Ministry of Energy cut ex-refinery prices by 0.08 to 0.35 baht per litre by removing embedded costs linked to Singapore market references that it said did not apply in Thailand. The Oil Fuel Fund committee also reduced retail diesel B7 prices by 1 baht and gasohol by 0.50 baht per litre.

Car production in Thailand dropped 6.1% ‌in September from a year earlier to 120,319 units, due mainly to the disruptive impact of flooding, the Federation of Thai Industries said. The reading followed a rise of 10.9% in August.

The Ministry of Finance said lower property transfer and mortgage registration fees helped lift residential transfers by about 17% in first half of 2026. The Bank of Thailand's relaxation of loan-to-value rules also supported 12% growth in mortgage lending.

Unitholders of the Grande Royal Orchid Hospitality Real Estate Investment Trust (GROREIT) approved the sale of the Royal Orchid Sheraton Hotel to a new investor for 5.3 billion baht, rejecting a lower buyback offer from the original owner, SET-listed Royal Orchid Hotel (Thailand) Plc.

The Government Housing Bank has launched a reverse mortgage programme allowing elderly homeowners to convert property value into cash to improve liquidity and support their quality of life.

i-Tail Corporation (ITC) completed its $160-million acquisition of Phelps Industries LLC, known as Phelps Pet Products, a US manufacturer of pet food and treats, expanding the Thai company's presence in the US market.

COMING UP: The US and China will update manufacturing PMI on Monday. Australia will announce an interest rate decision on Tuesday and the US will update factory orders. Wednesday brings updates on US trade, private-sector employment, services PMI and prices. Brazil and the UK announce rate decisions on Thursday. US nonfarm payrolls, unemployment and average hourly earnings data on Friday will be key indicators for the Fed's rate outlook.

Locally, Aberdeen Asset Management on Monday will hold a seminar on investment opportunities in key raw materials shaping future industries. On Wednesday, JPMorgan Asset Management and Kasikorn Asset Management will hold the "Know The Markets Summit 2026".

STOCKS TO WATCH: Asia Plus Securities recommends focusing on stocks that benefit from falling bond yields, offer defensive characteristics or are expected to report strong third-quarter earnings. Its top picks are: SCGP, supported by growth in Indonesia and Vietnam; SAWAD, on an expected loan recovery; and ITC, benefiting from a weaker baht and a positive Q4 outlook.

Bualuang Securities favours stocks with long-term growth potential and exposure to infrastructure expansion. GULF and BGRIM are positioned to benefit from rising data centre demand and infrastructure investment. CRC and COM7 for their resilient customer bases and pricing power, and CENTEL for demand from European and US long-haul tourists.

TECHNICAL VIEW: Asia Plus Securities sees support at 1,500 points and resistance at 1,545. Kasikorn Securities sees support at 1,510 and resistance at 1,545.