Longer-Term Impacts From War Constrain SET

Why It Matters

The conflict’s impact on oil supply is reshaping Thailand’s cost structure, squeezing consumer purchasing power and forcing investors to pivot toward energy and defensive stocks. This shift will influence corporate earnings, monetary policy, and the broader Southeast Asian equity landscape throughout 2026.

Key Takeaways

• SET index fell 5.2% in March, closing at 1,448 points.
• Oil prices jumped ~40%, pushing diesel above 50 baht ($1.43) per litre.
• Average daily turnover rose 3.3% to 74.9bn baht (~$2.1bn).
• GDP growth forecast cut to below 1% amid prolonged war.
• Energy and defensive stocks, e.g., Banpu, PTTEP, seen as safe bets.

Pulse Analysis

The March turbulence on the Stock Exchange of Thailand underscores how quickly geopolitical events can reverberate through regional markets. The Israel‑U.S. strike on Iran sparked the first circuit‑breaker activation of the year, as the SET Index plunged 8% in a single session. Simultaneously, the closure of the Strait of Hormuz drove crude to triple‑digit levels, inflating diesel to over 50 baht per litre (about $1.43). For an economy that imports more than half its oil from the Middle East, the shock translated into higher transport costs, supply‑chain strain, and a palpable rise in headline inflation.

Investors have responded by gravitating toward sectors that either benefit from high energy prices or offer defensive yield. Coal‑to‑power producer Banpu Plc stands to gain as Asian electricity demand leans on cheaper coal amid soaring gas rates, while PTT Exploration and Production (PTTEP) is positioned to capture premium oil prices projected at $90‑$100 per barrel through mid‑year. Meanwhile, Prima Marine’s oil‑storage logistics and GFPT’s poultry operations illustrate a broader theme: companies with exposure to commodity price movements or resilient cash flows are becoming the preferred bets in a market where earnings‑per‑share forecasts are being trimmed.

Looking ahead, the lingering effects of the Middle East conflict are likely to keep Thailand’s inflation trajectory upward, pressuring the central bank to consider tighter monetary policy. The revised GDP outlook—now below 1%—reflects both reduced consumer spending and higher input costs across manufacturing and services. As the SET navigates these headwinds, analysts expect continued volatility, with earnings revisions and sector rotation shaping the investment narrative for the remainder of 2026.