Although hopes for a peace agreement between the US and Iran have eased geopolitical concerns, prompting global stock markets to rally enthusiastically on the good news earlier,
investors should be cautious of hidden risks as many markets have already reflected much of the positive factors. Meanwhile, rising global government bond yields are increasing the appeal of safe assets.
This could attract some funds to flow out of stocks into bonds going forward, limiting further stock price gains more than investors might expect.
Geopolitical tensions are clearly easing after reports that the US and Iran are close to a peace agreement and plan to reopen the Strait of Hormuz within this week.
This reduces inflation concerns and has driven global crude oil prices sharply down, with Brent crude closing 4.8% lower as markets anticipate an additional oil supply of about 20% of global output.
As a result, global stock markets have rallied enthusiastically on the good news (as of 10:50 a.m.).
Meanwhile, Thailand's SET index opened higher but profit-taking pressure emerged in the morning, pushing the index into negative territory. At 10:50 a.m., the SET stood at 1,589.75 points, down 1.97 points or -0.12%.
Despite the upbeat investment climate, leading securities firms' analysts warn to be cautious of hidden risks.
Research team at Asia Plus Securities noted that entering peace talks is a clear positive psychological signal, but caution is needed against "overpricing" since global stock markets have largely recovered and priced in this good news.
The strong stock market rally has narrowed the gap between market earnings yield and bond yields (Market Earning Yield Gap: MEYG), limiting upside potential.
A key focus is the sharp rise in 10-year government bond yields globally, surging 30-50 basis points in the US, Europe, and Asia (e.g., US +53.6 BPS, UK +58.0 BPS, Thailand +37.6 BPS).
They also assess that higher and safer bond yields compared to stocks will pressure and accelerate capital flows from equities into bonds to lock in profits at this time.
Additionally, attention should be paid to the Bank of Japan’s rate hike to 1.00%, the highest in over 30 years.
. Analysts at Pi Securities share the view that Thailand’s stock market has gained about 4.2% since the war began, indicating the news has already been priced in. They also assess that the global economy in the second half of 2026 may face "headwinds" from fragile supply chains and risks of stagflation.
Although the US Federal Reserve’s rate hike cycle may ease, the outlook depends on the new Fed Chair’s views and the closely watched Dot Plot details.
Pi Securities recommends diversifying portfolios by reducing weight in low-cash-flow technology stocks and increasing exposure to energy, basic materials, and high-dividend stocks.
Both brokers agree on focusing investments on sectors benefiting from lower energy costs and economic recovery.
Asia Plus recommends three key sectors aligned with the easing war theme (Sector Rotation):
Pi Securities suggests focusing on stocks benefiting from lower oil prices, including:
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