Thai shares lost 0.7% yesterday, tracking the global slide, as investors fled to safe havens on mounting tensions between the US and North Korea. The local gold bullion price rose by 150 baht per baht-weight of gold to 20,250 baht per baht weight.
Asian stock markets were a sea of red. The benchmark SET index started the day on a sour note, and the intensified sell-off sent the main bourse to the day's trough of 1,556.22 points before bargain-hunting pared losses. The index settled at 1,561.31 in brisk turnover worth 43.3 billion baht.
The Hang Seng Index was the top loser in the region, slumping 2%, while South Korean shares ended 1.7% lower, the Shanghai Composite Index plummeted 1.6%, Singapore's FTSE Straits Times Index ended down 1.3% -- its biggest percentage loss since October 2016 -- and Indonesia's Jakarta Composite plunged 1%.
The baht, regarded as safe haven, rose a bit to 33.22 against the US dollar from 33.24 on Thursday. Gold prices touched their highest level in more than two months at US$1,285.76 an ounce.
Chaiyaporn Nompitakcharoen, executive vice-president of Bualuang Securities, said the rout was the story in most stock markets around the globe for over a week, driven by nerves over the intensifying rhetoric between the US and North Korea.
Disappointing listed-company earnings for the second quarter, largely due to weaker-than-expected net profits of large firms, also dampened investors' risk appetite, Mr Chaiyaporn said.
He voiced optimism, however, that offshore fund inflows to the Thai stock market would be seen in the final quarter, fuelled by attractive valuations and improving earnings in several sectors, including advertising, tourism and consumption.
Apichai Raomanachai, deputy managing director of Apple Wealth Securities, said the SET index's sell-off will continue if the situation in the Korean peninsula worsens.
He recommended investors hold onto cash until the geopolitical tension eases.
Long-term investors can accumulate fundamental stocks, which include banks, construction and property, Mr Apichai said.
Jitti Tangsithpakdi, chairman of the Gold Traders Association, said soaring gold prices are expected to continue and will reach $1,300 an ounce if geopolitical tensions escalate.
Other support for the precious metal comes from the rising odds of a steady US interest rate this year following lower-than-expected inflation.
MTS Gold president Kritcharat Hirunyasiri said that if North Korea ignores US President Donald Trump's warning by testing its missiles with the target of Guam, gold prices will shoot to above $1,300 per ounce.