Thai stocks slid 0.5% on a day of subdued trade across Asia, and in response to signs of a further slowdown in the domestic economy.
The Stock Exchange of Thailand Index fell 7.27 points from Thursday to close at 1,417.49, a decrease of 4.6% from the previous Friday's close of 1,486.76. Turnover was 31.4 billion baht, with 10.1 billion shares traded.
The local market is up 1.8% from the end of 2012 and down 13.8% from the year-high of 1,643.34 reached in mid-May.
The Finance Ministry on Friday trimmed its estimate for gains in gross domestic product this year to 3.7% from 4.5%.
The dollar value of Thai exports will increase by only 1.8% this year, instead of 5.5%, said Somchai Sujjapongse, head of the ministry's Fiscal Policy Office.
Foreign investors were net sellers on Friday of 3.49 billion baht worth of Thai shares, reducing their net buying for the month to 11.27 billion. On the year they are still net sellers of 104.7 billion baht.
Local institutions were net buyers of 1.63 billion baht and brokers bought 764.7 million. Individual investors were also net buyers of 1.09 billion baht.
World stocks drifted on Friday, with markets in China edging slightly higher as investors stayed cautious ahead of a major holiday and details from the highly anticipated free trade zone in Shanghai.
Stocks in Tokyo slid after Japan's inflation spiked.
In early European trading, the FTSE 100 index in London was off 0.3%, while Germany's CAC 40 and France's CAC 40 were down 0.1%. US stocks were poised to fall. Dow futures fell 0.1% to 15,241.00 while broader S&P 500 futures edged 0.2% lower to 1,688.50.
Hong Kong's Hang Seng Index rose 0.3% to close at 23,207.04 while the Shanghai Composite advanced 0.2% to 2,160.03.
Markets in China were subdued ahead of the launch on Sunday of a pilot free trade zone in Shanghai, which is expected to feature full yuan convertibility among other liberal measures.
A weeklong holiday that starts on Tuesday and follows another three-day holiday just last week was also expected to keep some investors on the sidelines.
Japan's Nikkei 225 dipped 0.3% to 14,760.07 after consumer price inflation rose at the fastest rate in five years in August.
South Korea's Kospi climbed 0.2% to 2,011.80 while Australia's S&P ASX 200 rose 0.2% to 5,307.10. Benchmarks in New Zealand, Taiwan and Singapore also advanced but India's dropped.
"People are cautious as we enter the last quarter and no point in taking a position with so many macro issues overhanging the market" such as a battle over the US debt limit looming in October, said Andrew Sullivan, director of Asian sales trading at Kim Eng Securities.
In Bangkok, the SET50 index of blue chips ended at 967.51 points, down 5.62 points, with total trade value of 22.73 billion baht. The SETHD index of high-dividend shares fell 6.16 points to 1,160.43, with turnover of 9.99 billion baht. The Market for Alternative Investment lost 0.98 points to 3559.74, with transaction value of 1.64 billion baht.
The five most active shares by value were SCB, falling 2.50 baht to 154 baht; CPALL, up 75 satang to 36 baht; ADVANC, down 4 baht to 259; TRUE, down 5 satang to 7.90 baht; and KTB, down 50 satang to 19.90 baht.
In the currency markets, the baht completed its worst week this month on concern that the country's recession will deter foreign inflows while the government lowered its growth estimate for 2013.
The currency weakened as Barclays cut its 2013 economic expansion forecast for Thailand to 2.5% from 3.5%. It cited a domestic credit crunch, waning stimulus and lack of confidence.
The economy shrank in the first two quarters, while exports fell for three months through July before a slight rebound in August.
The baht dropped 0.6% from a week ago and was trading late Friday in Bangkok at 31.30/35 to the US dollar, compared with 31.12/19 on Thursday and 30.94/96 a week earlier.
The baht has retreated 1.4% from a two-month high of 30.88 on Sept 20 touched after the Federal Reserve decision to maintain its record stimulus. The SET Index has declined 4.9% over the same period.
"The economy is likely to remain on the downtrend in the second half due to the slowdown in exports," said Thammarat Kittisiripat, an economist at TMB Bank. "The baht will depreciate and fund outflows in the short term will continue."
In the bond market, the yield on the 3.625% bonds due in June 2023 fell seven basis points this week to 3.94%, following a decrease of 37 basis points last week that was the biggest drop since August 2011.