The stock market's board chairman has cautioned investors against panic selling, saying the Thai economy is strong.
The Stock Exchange of Thailand closed down 16.75 points to a six-month low at 1,461.74 on Monday in trade worth 75.87 billion baht.
The index sank 55.83 points to 1,422.63 at 11am before paring the losses to 16.75 points.
Foreigners and brokers were net sellers of 8.37 billion and 2.71 billion baht. Local institutions and individuals were net buyers of 5.67 billion and 5.41 billion baht.
The index continued its slide from Monday, when it nosedived 9% in intraday trade before picking up to close at 1478.49, down 2.41%.
Sathit Limphongpan told a seminar on Monday the volatility in the local stock market was in line with regional markets. It was triggered by an oil price slump to the lowest in five years.
"Since energy-related stocks make up almost 10% of the SET market capitalisation, the declines put pressure on the SET index," he said.
"We should look into the fundamentals of each stock. Unsubstantiated rumours affected sentiment for the short term, "he said adding no measures were planned as no irregularities were detected.
On the bright side, he said the low oil prices will help listed companies to perform better.
"Given their costs will be lower and inflation at a low level, growth next year could be in a range of 3.5% and 4%. This, coupled with megaproject investment, will lift the index nest year."
Prime Minister Prayut Chan-ocha reassured investors and urged them not to panic over rumours, which he said was not intended to rattle his government.
But Finance Minister Sommai Phasee said he had asked the Securities and Exchange Commission to watch out for a gang who manipulated shares to buy at low prices.
Exodus continues
Around Asia, Bloomberg reported emerging stocks fell for an eighth day, led by losses in Dubai and Indonesia, as the slump in oil roiled energy companies and a gauge of Chinese factory output declined. Russia's ruble jumped after interest rates were raised by the most since 1998.
Equity gauges in Dubai and Abu Dhabi slid to the lowest levels in a year. The ruble rallied 5% against the dollar, its steepest jump on record, snapping a six-day slide.
The MSCI Emerging Markets Index fell 0.6% to 918.78 at 8.03am London time, on course for its lowest close since Feb 5 and the longest losing streak since September. Oil declined for a fifth day amid speculation that US producers may further increase output. A reading of Chinese factory activity for December dropped to a seven-month low, adding to the case for further stimulus to halt a slowdown in the world's second-largest economy.
"Rising risk perception will naturally lead to risk aversion in emerging-market equities," said Alan Richardson, an investment manager at Samsung Asset Management Co in Hong Kong. "It's a vicious circle of rising bond yields, capital outflow, currency weakness and declining stock markets."
Nine out of 10 industry gauges in the MSCI Emerging Index fell, led by utility and health-care companies. The developing-market measure has lost 8.4% this year and trades at 10.6 times projected 12-month earnings. The MSCI World Index has slid 0.4 percent and is valued at a multiple of 14.9.
Gulf slump
The emerging-markets index has tumbled 6.8% in an eight-day losing streak starting Dec 5, sending its 14-day relative strength index to 17.8. Some investors see a reading of less than 30 as a signal that an asset is poised to rebound.
Dubai's DFM General Index plunged 7.6% and Abu Dhabi's ADX General Index retreated 4.4%. Both measures are on course for the lowest close since December 2013. Emaar Properties PJSC dropped 8.1 percent in Dubai, while Aldar Properties PJSC fell 10 percent in Abu Dhabi.
Ruble rally
The Indonesian rupiah rose 0.1%, reversing an earlier loss, after Bank Indonesia intervened to stem a retreat that saw the currency close yesterday at the lowest level since the Asian financial crisis. Finance Minister Bambang Brodjonegoro said today that the current weakness of the rupiah is temporary.
The Jakarta Composite Index fell 1.9%, heading for its steepest drop since Oct 2.
Russia's central bank unexpectedly raised its benchmark interest rate to 17% from 10.5% yesterday, its biggest step yet to shore up the ruble and defuse the currency crisis threatening the country's stricken economy.
The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong fell 0.5%. PetroChina Co lost 2.2% and China Petroleum & Chemical Corp retreated 1.5%. The Shanghai Composite Index gained 2.3% as Citic Securities Co rallied 10%.
The Philippines's benchmark equity gauge fell 1.6%, while India's S&P BSE Sensex Index retreated for a fourth day, dropping 1.5%. The FTSE Bursa Malaysia KLCI Index lost 0.5%, heading for the lowest close since Aug 28, 2013.
