Thai shares fall on looming US impasse

Thai shares fall on looming US impasse

Thai shares yesterday tumbled below the psychological 1,400-point mark again on growing concerns over the looming shutdown of the US government amid a budget impasse.

Worries over local political uncertainties and foreign fund flows also dented demand for risk assets.

The Stock Exchange of Thailand (SET) index shed 2.42%, among the biggest losers in Asia, to 1,383.16 points in moderate trade worth 32.7 billion baht. Big-cap stocks were at the centre of the selling spree. Siam Commercial Bank (SCB) dipped 6 baht to 148 baht, PTT (PTT) dropped 10 baht to 316, Shin Corporation (INTUCH) lost 1.50 baht to 81.50 baht and Kasikornbank (KBANK) was off 7 baht to 175 baht.

Foreign investors remained net sellers of Thai shares yesterday, amounting to 1.66 billion baht. They sold 10.1 billion baht more than they bought in Thai shares last week alone.

The rising risk of the first US government shutdown in 17 years also jolted most Asian stock markets, particularly Thailand, Indonesia and the Philippines (the TIP markets). The Philippine Stock Exchange's PSEi index sank 2.95%, the Nikkei 225 slid 2.06% and the Jakarta Stock Exchange Composite Index lost 2.43%.

Kasikorn Securities vice-president Kitpon Pripisankit said anxieties over the US budget and the debt ceiling have turned investors to risk-off mode, while TIP markets are still under selling pressure from foreign investors who are reallocating their investment portfolios to developed markets whose economies are staging a recovery.

"It is likely we'll see the SET index fall to 1,350 or lower before Oct 17, but we recommend investors to enter the stock market at that level," he said.

After foreign investors sold Thai shares with a net position of more than 100 billion baht so far this year, Mr Kitpon said their selling will recede soon.

In addition to the US budget, the US debt ceiling will also need to be raised by Oct 17 to avoid the government partially defaulting on its obligations.

Chai Chirasevenupraphund, head of investment research at Capital Nomura Securities, said external and internal factors took a toll on the Thai stock market yesterday. Looming risks include the court ruling on the charter amendment and the US debt ceiling.

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