Despite an intra-day dip, the Stock Exchange of Thailand (SET) index bucked the trend of the regional sell-off as the bourse's resilience was attributed to a rally in large-cap stocks and Thailand's economic fundamentals.
Most Asian bourses stumbled yesterday, with Japan's Nikkei 225 index falling by 3.7%, following Wednesday's desolation on Wall Street where investor confidence was shaken by concerns over corporate profits and a slower economic growth outlook in China and the US.
There was volatile trading on Thailand's benchmark index, with the SET plunging to 1,596.40 points in the morning session before rebounding to close at 1,644.30, up 1.3% or 20.96 points from Wednesday's close, in turnover worth 76.1 billion baht.
Large-cap stocks rallied and dominated the stock market recovery, with PTTEP's share price edging up by 2.6%, while PTTGC gained 2.4%.
The SET had seen the biggest drop among Asian bourses on Wednesday, tumbling by over 2% or 35.19 points to close at 1,623.37, with energy stocks sliding after a recent decline in oil prices.
Viwat Techapoonphol, deputy managing director of Tisco Securities, said investors' anxiety is correlated with how rising inflationary pressure in the US is expected to induce a faster rate-hike pace by the US Federal Reserve, while the Trump administration's protectionist trade measures are poised to weaken the global economic growth trajectory.
US economic growth is projected to lose pace this quarter and into next year, with fund flows poised to move from the stock market to the bond market and other safe-haven assets, Mr Viwat said.
"The US's international trade strategy has reversed to attack itself," he said. "Investors are losing confidence in the US economy despite good economic figures and the net profit of listed companies being driven by major economic stimulus policies and lower corporate taxes."
Concerns are mounting that the US's import tariffs will take a toll on US businesses, Mr Viwat said.
"We expect good sentiment for the stock market will reappear after the US midterm elections scheduled for Nov 6," he said. "We expect Democrats will win seats in both the Senate and House of Representatives, then we will have to watch how Mr Trump does for the rest of his term."
Terdsak Taweetheeratham, senior vice-president of Asia Plus Securities, said the volatility in the Thai stock market stems from the rout in the global equity markets.
But the SET index has strong support at 1,600 points, with a price-to-earnings ratio of 16, Mr Terdsak said. Now is a good time for long-term investors to embark on accumulative buying of stocks because share prices can swing lower, he said.
Pawan Nawawattanasub, chief executive of YLG Bullion International, said gold prices have experienced volatility from fund flow fluctuation and the global trade war. Gold prices stand above US$1,230 an ounce, with domestic gold prices, where 96.5% is pure gold, gaining from the baht depreciation, Mrs Pawan said.
The main factor affecting gold prices is the Fed's interest rate hikes, she said.
The Thai Bond Market Association reported yesterday that foreign flows continued moving into the Thai bond market at 1.76 billion baht, mostly in long-term debt securities. Month-to-date net inflows totalled 21.4 billion baht, while year-to-date net inflows logged 123 billion.