The Stock Exchange of Thailand (SET) suffered a steep plunge Thursday as another heavy sell-off was triggered by unrelenting fears over the Sino-US trade war, with the retaliatory tariffs between the two economic giants taking effect Friday.
Uncertainty over the second-quarter financial performance of listed companies and the outlook of energy prices added further pessimism to investor sentiments.
The SET index closed at 1,601.42 points, falling by 27.78 points or 1.71%, in moderate turnover worth 55.7 billion baht. The bourse slumped to 1,596.55 points at one point during trading hours.
Cosmetics, energy and utility stocks were the top losers, with Beauty Community plunging by 28.9%, PTT Plc shedding 3.1%, and Indorama Ventures sliding by 5.3%
Foreign investors continued to be net sellers at 1.35 billion baht, with brokerage firms and institutional investors selling 62 million and 370.9 million worth of shares, respectively. On the other hand, retail investors were net buyers of 1.8 billion baht.
Foreign holding of Thai equities last month stood at 30.93% of the bourse's market capitalisation, down from 31.06% logged in May 2017, according to SET data.
Foreign investors were net sellers of local shares worth 170.9 billion baht between June 2017 and May 2018.
Despite a series of heavy foreign sell-offs, total foreign holding in May valued at a record high of 5.22 trillion baht, up 13.10% year-on-year.
Poranee Thongyen, senior executive vice-president at Asia Plus Securities, said concerns over the Sino-US trade war still prevail despite government-level tensions receding in the short term.
The US and China are set to impose the first round of 25% import tariffs on goods worth US$34 million (1.13 billion baht) against each other today.
The second round of US duty hike on imports worth $14 billion depends on July's public hearing, while China is anticipated to retaliate at the same extent.
The EU's warning to impose a second round of import tariff hikes on US goods worth $294 billion could add fuel to the already-intense the global trade war flames, said Mrs Poranee. The move is a retaliation against the US's decision to raise import tariff on auto products, to be concluded in August.
Second-quarter earnings among SET-listed companies, meanwhile, are projected to weaken from the first quarter, where the net profit of the banking sector is expected to fall by 11% quarter-on-quarter due to lower online banking fees and a change in consumer behaviour related to using smartphones for financial transactions instead of physical counters, she said.
Win Udomrachtavanich, chief executive at KTB Securities, said the global trade war, higher interest rate outlook, and the domestic sell-off of Beauty Community shares contributed to Thursday's stock market plunge.
But Deputy Prime Minister Somkid Jatusripitak assuaged fears on the stock market slump, saying the bourse could move in either direction, while the larger spread between Thailand's interest rate and foreign interest contributed to capital outflows.
Foreign funds will return to the Thai bourse as the country's economic fundamentals are sound and investors should not panic about outflows, said Mr Somkid.