SET trips on US-China fears, foreigners flee

SET trips on US-China fears, foreigners flee

Investors across the world unload shares

The SET Index dropped on Wednesday due to escalating US-China trade spat.
The SET Index dropped on Wednesday due to escalating US-China trade spat.

Thai shares plunged almost 1% on Wednesday as the sell-off continued on lingering fears of an escalation in the US-China tariff spat.

The benchmark Stock Exchange of Thailand (SET) index, tracking losses on Wall Street and other regional peers, started on a sour note at the opening bell and fell to the day's trough of 1,650.24 points before rebounding to close 0.94% lower at 1,654.01 in brisk turnover of 55.6 billion baht.

Foreign investors yanked out 1.89 billion baht, putting their net sales at 14.2 billion this year.

The SET extended its losing streak on Wednesday, tumbling 25 points or 1.5% from last week's market close.

On the regional front, Japan's Nikkei index on Wednesday shed 1.46%, Hong Kong's Hang Seng index was down 1.23%, China's main Shanghai Composite index closed down 1.12%, Singapore's Straits Times index fell 0.87% and Indonesia's Jakarta Composite index dropped 0.43%.

Philippine stocks, however, reversed course to close marginally higher, after plunging 2% earlier in the session.

Terdsak Taweethiratham, vice-president at Asia Plus Securities (ASP), said trade jitters have prompted investors to continue to unload shares across the world.

He believes negotiations between the US and China will eventually reach a conclusion, averting higher tariffs.

Chinese Vice-Premier Liu He is due to visit Washington on Thursday and Friday for trade talks in a last-ditch bid to avert a sharp increase in tariffs on Chinese goods ordered by US President Donald Trump, according to Reuters.

In this unclear environment, the brokerage house recommended investment in defensive domestic stocks that will benefit from the government's economic stimulus package and stocks that posted improved first-quarter performance. Seafco (SEAFCO) and Robinson (ROBINS) are ASP's top picks.

Veeravat Virojpoka, director of Finansia Syrus Securities' research unit, expects Thai shares to veer wildly today on expectations about the Sino-US trade talks.

Soraphol Tulayasathien, senior executive vice-president of the SET, said at a media briefing summarising the index's performance in April that Thai shares were the No.2 performer in Asean, with a 2.1% gain from the end of March. In April, foreign investors bought a net 3.34 billion baht in Thai shares.

The combined market capitalisation of the SET and the Market for Alternative Investment at the end of April increased by 7% from the end of last year to 17.4 trillion baht. Funds mobilised through IPOs during the first four months amounted to 6.05 billion baht, the highest in Asean.

Mr Soraphol said trading in April on the Thailand Futures Exchange plunged by 35% from March to 263,192 contracts per day.

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