Investor confidence for the next three months has dropped slightly, weighed by concerns over government stability and US-China trade talks.
The investor confidence index for May to July remained in neutral territory for a second straight month, though it edged down to 104.49 from 107.53, according to the monthly survey by the Federation of Thai Capital Market Organizations (Fetco).
An index below 80 points is considered bearish, 80-120 is neutral and over 120 is bullish.
Foreign investor confidence, however, fell to neutral from the bullish zone, while broker trading rose to bullish from neutral terrain, said Fetco chairman Paiboon Nalinthrangkurn.
Energy & Utilities (ENERG) was the most attractive sector for investors, while mining (MINE) drew the least investor interest.
The local political situation plays the biggest role in determining investor confidence, Mr Paiboon said, as the market is eagerly awaiting the official announcement of parliamentary seats and the instalment of a new government.
Capital mobility and the tourism sector are lending support, he said.
Anxiety over the new government's stability is the biggest factor dampening investor confidence, followed by geopolitical tensions and a domestic economy dragged by the global slowdown.
Global economic factors that warrant monitoring include anticipation of the US and China reaching a trade agreement in May; the dispute between the US and the EU over aviation industry subsidies that could affect import tariffs; the EU's weak economic momentum and the further risk of an EU economic slowdown; Brexit developments after the deadline was postponed to Oct 31; China's less-aggressive stance on economic stimulus policy after first-quarter GDP fared better than expected at 6.4%; and the impact on oil prices after the US ended waivers on Iran's crude oil exports.
The benchmark SET index on Tuesday fell 0.56% to 1,669.68 in trade worth 51.47 billion baht, hurt by mounting worries over US-China trade relations after President Trump threatened to hike tariffs on Chinese goods this week.
Ariya Tiranaprakij, deputy managing director of the Thai Bond Market Association, said the interest rate expectation index for the Bank of Thailand's next policy rate meeting in May rose to 60 but stayed in the same range, reflecting the market's belief that the central bank will keep the rate unchanged at 1.75%.