Stocks Under Pressure as Energy Crisis Bites

Why It Matters

Rising diesel costs directly erode Thailand’s GDP growth and corporate earnings, creating volatility for investors and prompting a shift toward defensive and stimulus‑linked stocks.

Key Takeaways

• Diesel price up 69% to 50.54 baht (~$1.53) per litre.
• SET index projected 1,400‑1,500; downside to 1,340 if diesel stays high.
• 10% diesel rise could cut GDP by 0.1% and EPS by 0.3‑0.4%.
• Government stimulus and BoI incentives target infrastructure and digital economy.
• Bank of Thailand likely holds rate at 1% amid energy‑driven inflation.

Pulse Analysis

The surge in diesel prices to roughly $1.53 per litre marks the steepest increase in years for Thailand, echoing the supply shocks of the 1970s oil crises. With diesel accounting for a sizable share of transportation and logistics costs, the 69% month‑to‑date rise is already feeding through to higher consumer prices and squeezing profit margins across sectors. Analysts estimate that each 10% jump in diesel could trim GDP by 0.1%, underscoring how energy volatility now dominates macro‑economic forecasts.

Equity markets feel the ripple effect. Bualuang Securities projects the SET index to hover between 1,400 and 1,500 points, but a prolonged diesel spike could push the benchmark toward 1,340. Investors are therefore gravitating toward themes with lower energy exposure: infrastructure projects buoyed by foreign direct investment, digital‑economy assets benefiting from Board of Investment incentives, and high‑yield dividend stocks supported by tax‑advantaged accounts. These defensive plays aim to preserve earnings as EPS forecasts dip 1.2‑1.5%.

Policy levers remain limited. The Bank of Thailand is expected to keep its policy rate at 1% through early 2026, as traditional rate hikes would do little to curb supply‑side inflation. Instead, the focus is on targeted fiscal stimulus, such as the ‘Thai Help Thai Plus’ program and expedited BoI approvals, to offset energy‑related cost pressures. For investors, the key will be monitoring diesel price trajectories and the pace of geopolitical de‑escalation, which together will shape Thailand’s growth outlook and equity performance over the coming months.