The Thai stock market fell by 1.2% yesterday on investor expectations of a prolonged slowdown in the US economy and domestic political uncertainty.
The falling Stock Exchange of Thailand (SET) index was in line with the global market as investors shifted from equities and commodities to hold secured assets.
The index dropped 15.58 points to close at 1,281.81, with trading worth 33.7 billion baht.
Large capitalisation stocks were sold as economists anticipated the US government would announce 1.8% growth of gross domestic product for the third quarter. Even though this would be an improvement from 1.3% in the second quarter, analysts believe it would not be enough to support domestic consumption.
SET president Charamporn Jotikasthira said the equity market remains volatile because a solution to the global economic crisis has not been found.
He said the main factor behind the falling index was that third-quarter operating results for Amazon and Apple disappointed investors, reflecting the possibility of the US economy sliding further.
The performance of the two companies indicated the declining spending power of Americans.
Equity markets, especially in Asia, dropped sharply along with the Dow Jones Index as fears grew that the US recovery will take a long time.
Mr Charamporn said news of an impending cabinet reshuffle had not affected market sentiment, but telecommunications stocks had fallen significantly over the investigation into the 3G bidding.
"Even if the SET index falls further, it will be an opportunity to accumulate stocks, as the economy and listed firms' performance remain strong," he said.
Kongkiat Opaswongkarn, the chief executive of Asia Plus Securities, said investors have been cautious due to several uncertainties in the US.
If Mitt Romney defeats Barack Obama in next month's presidential election, then policy changes will be a major concern, especially Mr Romney's policy of creating new jobs for Americans that would affect US trade with China and the rest of Asia, he said.
Mr Kongkiat advises Thai investors to diversify to foreign markets such as China and the US, where stocks have dropped in recent years.