The Thai share market slumped 2.55% yesterday as investors fled to safe havens from risk assets amid a slew of negative factors, both internal and external.
The Stock Exchange of Thailand (SET) index ended 38.93 points lower at 1,489.53 in trading worth 49.9 billion baht. Foreign investors sold 3.08 billion baht more than they bought, while retail investors were net buyers of 3.12 billion.
The benchmark index tumbled 4.6% this week.
Somchai Anektaweepon, the research manager at Finansia Syrus Securities, said the stuttering global economy and escalating tensions on the Korean Peninsula are whittling down risk appetite.
US unemployment benefit claims for March rose to their highest level in four months last week, suggesting the labour market recovery lost some steam, he said.Korean tensions could also take a toll on stock sentiment, although intra-regional investment and trade would be spared if both countries declare war.
The Constitution Court's decision to hear a case that may block constitutional amendments also dampened the market.
"With both external and internal risks and the long Songkran holiday approaching, investors are reducing their trading activities and holding more cash to mitigate risk," said Mr Somchai.
Adisak Phupiphathirungul, an investment strategist at Thanachart Securities, said the new bird flu strain in China is a major risk to watch, as it could spread to neighbouring countries and affect tourism and aviation stocks.
With a higher collateral requirement for margin loans after the market plunged, many margin loan investors decided to close their positions rather than add collateral, as market sentiment remains sour.
Mr Adisak said the SET will remain volatile next week, with support and resistance in a range of 1,465 to 1,505 points.
In related news, gold investment is expected to return less than 10%, in a range of US$1,750 to $1,850 an ounce in a best-case scenario but could lose 8-10% to $1,450 an ounce in the worst case, said Kamoltun Pirnphaisarnvichit, director of the Gold Research Center.
Gold dipped 4-5% during the first three months of this year.
The centre expects the global gold price to teeter between $1,500 and $1,800 an ounce this year.
The local price could decline to 21,000 baht per baht-weight, but it will not tumble below 20,000 baht, said Mr Kamoltun.
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Writer: Nuntawan Polkuamdee and Darana Chudasri