Thai shares shed almost 2% yesterday as oil prices neared a seven-year low and downbeat China trade data weighed on market sentiment. Stock analysts warned the main bourse was likely to sink below the psychological 1,300-point level.
The Stock Exchange of Thailand (SET) index, Asia's worst performer on the day, began on a sour note and selling pressure intensified in the afternoon session before the market closed at 1,306.98.
Trade value was moderate at 36.9 billion baht due to the shortened week. The Thai stock market was closed on Monday for a public holiday.
Big-cap energy stocks led losses. National oil and gas firm PTT fell by 11 baht to 241 baht, PTT Exploration and Production (PTTEP) four baht to 57.75 baht, PTT Global Chemical (PTTGC) 1.25 baht to 49.75 baht and Star Petroleum Refining (SPRC) one baht below its nine-baht initial offering price in the stock's first day of trade.
In other sectors, CP All (CPALL) fell by two baht to 41 baht, Kasikornbank (KBANK) 5.50 baht to 160.50 baht and Siam Cement (SCC) eight baht to 438 baht.
Institutional investors, foreign investors and proprietary traders yanked a respective 1.5 billion, 353 million and 185 million baht out of the Thai stock market, while retail investors bought 2.04 billion baht more than they sold.
Thai stocks have declined by 12% year-to-date.
Most Asian indices retreated yesterday. The Shanghai Composite lost 1.89%, the Hang Seng 1.34%, the Jakarta Composite 1.27%, the PSE Composite 1.06% and the Nikkei 225 1.04%.
"A technical rebound may emerge in the [local] stock market after signs of overselling, but such a rebound would not be so significant while lingering negative factors cap the upside," said Kiatkong Decho, a strategist at CIMB Securities (Thailand).
"It's still possible to see the SET index dip below the 1,300 mark for the remaining period of this year."
He said oil prices and external factors such as global economic indicators and the timing of the US Federal Reserve's first rate rise in nine years would put pressure on the Thai stock market.
If the Fed starts normalising at this month's meeting as expected, it will be a clear-cut signal for the stock market and could push up global stocks and commodities in the medium term, the strategist said.
On the other hand, if the US central bank decides to delay raising the rate, it could trigger a big round of sell-offs over doubts about the world's largest economy, he said.
The steep fall in global oil prices and weak economic readings out of China overshadowed the auction result of the Jira-Khon Kaen double-track rail route, ASL Securities said in a research note. Ch. Karnchang won that contract, and the cabinet also approved the Orange Line electric train route from the Thailand Cultural Centre to Min Buri.
There is no sign of a strong rebound in the SET index as long as negative factors such as low oil prices and a possible Fed rate rise persist, said Mayuree Chowvikran, senior vice-president for research at Maybank Kim Eng Securities (Thailand).
Oil prices sank to their lowest in almost seven years yesterday after Opec failed to reach a consensus on cutting production to address a supply glut.
Ms Mayuree agreed with Mr Kiatkong that the Thai stock market had an upper limit in the short term.
China's weakening economic data will be a drag on the Thai bourse, she said.
Meanwhile, SET president Kesara Manchusree said the Thai stock market reacted negatively yesterday to the oil price's nosedive.
She voiced hope those concerns would be short-lived and that the SET's low price-to-earnings ratio would attract foreign fund flows.
The Thai economy remains prosperous in anticipation of increased infrastructure spending and improved profits of listed companies next year, she added.