Thai shares retreated 1.69% yesterday, led by a sell-off in blue-chip energy stocks after oil prices fell to a six-year low, while concerns over local stocks' high valuations amid weakening economic prospects lingered.
The Stock Exchange of Thailand (SET) was Asia's worst performer yesterday.
It started the day on a sour note before the magnitude of the selling spree intensified in the afternoon session, falling 25.98 points to close the market at 1,515.57, in moderate trade worth 45.4 billion baht.
The energy sub-index shed 2.27%, with national oil and gas conglomerate PTT Plc tumbling 2.16% to 317 baht, PTT Exploration and Production Plc 3.74% to 103 baht, PTT Global Chemical Plc 0.47% to 53 baht, IRPC Plc 4.11% to 4.20 baht and Bangchak Petroleum 1.46% to 33.75 baht.
Foreign investors bought 712 million baht more than they sold, while retail investors were net buyers of 1.81 billion yesterday.
Institutional investors and brokers yanked 1.97 billion baht and 556 million, respectively, out of the local bourse.
The main gauge has plummeted 71.44 points or 4.5% this month.
"If oil prices do not slip below US$40 a barrel, Thai shares will stand firmly above the 1,500-point support level. I think downside is fairly limited, as foreigners' holding in the Thai bourse is the lowest since 2008," said Kittichan Sirisukarcha, head of retail research at CIMB Securities (Thailand).
He said foreign investors' holdings in Thai shares amounted to 32.7% of the market's overall value.
Oil extended its collapse to the lowest intra-day price since March 2009 on speculation that record US supplies may start to strain the country's storage capacity. West Texas Intermediate for April delivery was down by 42 cents to $44.42 a barrel after losing 4.7% last Friday.
If crude oil drops below $40 a barrel, a fresh sell-off in energy stocks will be triggered, pulling the SET below 1,500 points, said Mr Kittichan.
The Bank of Thailand unexpectedly cut its benchmark rate last week by 25 basis points to 1.75%, implying the country's economy could grow slower than its 4% estimate, hurting listed companies' earnings, he said.
The central bank will release a scaled-back 2015 growth forecast on Friday.
Teerada Chanyingyong, an assistant vice-president at Phillip Securities, warned the SET could slip to 1,480 points.