Europe, Asia turmoil spills over to SET

Europe, Asia turmoil spills over to SET

Thai shares plunged 1.84% Thursday on sharp sell-offs in late trade due to anxiety over the stuttering global and Thai economies and slides in European stock markets.

Energy blue-chip stocks also experienced selling pressure after the oil price traded near a 12-year to weigh on stock market sentiment.

The Stock Exchange of Thailand (SET) index swung back and forth between negative and positive territories in the morning trading session, while the fierce sell-off kicked in during the final trading hour.

The main gauge closed the market at the day's trough of 1,280.74 points in brisk trade worth 45.4 billion baht.

National oil and gas conglomerate PTT Plc dipped eight baht or 3.39% to 228 baht, PTT Exploration and Production Plc (PTTEP) 6.49% to 54 baht, PTT Global Chemical Plc (PTTGC) 5.21% to 50 baht, Thai Oil Plc (TOP) 4.74% to 60.25 baht and Bangchak Petroleum 2.56% to 28.50 baht.

Banking stocks were also at the centre of the selling spree. Kasikornbank (KBANK) dropped 1.8% to 163.50 baht, Siam Commercial Bank (SCB) 2.27% to 129 baht, Krungthai Bank (KTB) 1.13% to 17.50 baht and Bangkok Bank (BBL) 0.67% to 148.50 baht.

Foreign investors returned to buying Thai shares Thursday with a net position of 193 million baht, while brokers yanked 2.32 billion baht out of the stock market.

Most Asian bourses also experienced turmoil. Hong Kong's Hang Seng index plunged 3.85% and South Korea's Kospi 2.93% following the Chinese New Year holiday, while China's stock market has not resumed trading yet.

Tisco Securities senior vice-president Apichart Poobunjirdkul said an intense sell-off in European bourses prompted by disappointing earnings by France's Societe Generale SA and the oil price slump spilled over into the Thai stock market.

Early Friday, all European bourses were sagging. The DAX index fell 2.46%, the CAC 40 index 3.31% and the FTSE 100 index 2.25%. European shares had dropped 17% for the year as of Tuesday, reaching their lowest levels since October 2013 before rebounding by 1.9% on Wednesday, according to Bloomberg.

An investor monitors share prices on an electronic board at a Bangkok brokerage. (Photo by Thanarak Khunton)

In New York, US stocks fell again during the Thursday (US time) session, with 80% of companies in the benchmark S&P 500 Index showing early declines.

A warning by US Federal Reserve chairwoman Janet Yellen over the global economy also sapped risk demand. She told Congress that further interest-rate increases might be pushed back due to the global market turbulence.

Meanwhile, Mr Apichart said concerns over China’s cooling economy and the Thai economic outlook would continue to dampen the Thai bourse.

The SET index is expected to drop further in the foreseeable future but should not hit this year’s low of 1,220 points again, he said.

SCB Securities investment strategist Ekpawin Suntarapichard said external factors, particularly worries over European banks' deteriorating profitability from the negative interest rate era and defaults, were influencing the Thai stock market.

Do you like the content of this article?
COMMENT