Thai shares retreated Tuesday as investors were spooked by intensified geopolitical concerns after the assassination of Russia's ambassador to Turkey and violent incidents in Germany and Switzerland.
The benchmark SET index went up a tad in early trade before selling pressure later gathered pace, dragging the index down to the day's trough of 1,507.91 points. The Thai stock market closed the day at 1,511.65, losing 0.7% in moderate trade value of 41.2 billion baht.
Foreign investors sold off a net of 793.9 million baht Tuesday, narrowing their net buy to 74.9 billion as of Dec 20.
Most of Southeast Asian stock markets suffered the same fate as the Thai stock market Tuesday, with the Philippines' PSE Composite index tumbling the most at 0.8%, while Indonesia's Jakarta Composite fell 0.6%.
In the broader picture, Asian stock markets closed mixed. Japan's Nikkei 225 recorded another fresh high for the year, advancing 0.5%. South Korea's Kospi gained 0.2%, while Hong Kong's Hang Seng index fell 0.5% and the Shanghai Composite Index in mainland China plunged 0.5%.
On foreign exchange markets, the baht hit multi-month lows, falling to just above the 36-threshold, while the Malaysian ringgit slipped to its weakest level in nearly 19 years versus the US dollar. The Singapore dollar also hit a seven-year low of 1.4507 before rebounding, with market participants citing suspected US dollar-selling intervention by Singapore's central bank, according to Reuters.
Chaiyos Jiwangkool, research manager at Globlex Securities, said investors reacted negatively to the global geopolitical tensions and this took a toll on the Thai stock market.
Rising anxiety over capital outflows after the US Federal Reserve's hawkish view on the faster pace of interest rate hikes next year also weighed on market sentiment, he said.
Fed Chair Janet Yellen's upbeat view of the US job market, which improved to its strongest in nearly a decade, increased odds of more rate increases next year.
A securities analyst at Bualuang Securities who requested anonymity said that it is normal practice for foreign investors to downsize their investment portfolios in December and it is likely to cause a seasonal increase in stock prices in January of next year, as it occurred in 2015.
Foreign investor holdings in Thai shares have declined to a mere 29%, the lowest level in five years, from a norm of 32%.
The analyst estimated that fund inflows will be 350 billion baht next year.