Share prices on the Stock Exchange of Thailand dived on Tuesday on fears of a possible trade war after tariff hikes by the US administration.
The SET Index plunged 42.30 points, or 3.76%, to 1,082.91 only minutes after the market opened. It ended the day down 50.62 points, or 4.5%, at 1,074.59. Turnover was 66.7 billion baht.
The Thai bourse opened after a three-day holiday, while other markets experienced jitters on Monday due to concerns about a possible recession because of US President Donald Trump’s policy.
Gulf Development Plc led the losses on Tuesday as its shares dropped 5.00 baht, or 11%, to 40.50, followed by Kasikornbank, down 8.5% to 146 baht; Krungthai Bank, down 8% to 20.90 baht; and SCB X, formerly Siam Commercial Bank, down 7% to 114 baht.
Foreign investors were net sellers of 2,47 billion baht worth of Thai shares on Tuesday. Local institutions were net sellers of 4.76 billion and brokerages 96 million baht. Local retail investors were net buyers of 7.34 billion baht.
The SET said on Monday it would temporarily ban short selling of stocks and tighten other share trading rules to curb volatility as the fallout from the sweeping US tariffs roiled global markets.
The ban on short selling of all securities, except for market makers, and a narrower band for stock movements will be effective from Tuesday and will end on Friday at the latest, the exchange said.
The curbs are meant to mitigate potential volatility and provide investors with an opportunity to assess their response to the US tariff barrage that has triggered a global market downturn, it said.
Thailand was hit by a tariff of 36%, among the highest rates in the region. The country’s trade surplus with the US totalled $45 billion last year.
Even before the Trump administration’s levy announcement, Thailand’s stock market was among the world’s worst performers this year as investors headed for the exit amid dwindling corporate profits and a dim outlook for the economy.
The benchmark SET index lost 4.3% last week, extending losses this year to almost 20% and hitting a five-year low.
The bourse said it would conduct continuous market surveillance and recalibrate its measures based on prevailing market conditions, it said in the statement. The temporary measures also cover SET’s other platforms: the Market for Alternative Investment and Thailand Futures Exchange.
Highlights of trading rule revisions are:
- The ceiling and floor limits on stocks/unit trusts traded on SET and MAI cut to +/-15% from +/-30%;
- For foreign shares band lowered to +/-30% from +/-60% now;
- For index futures/options and single stock futures the ceiling and floor lowered to +/-15% from +/-30%;
- The daily ceiling and floor limits will not apply to DR and DRx products;
- Reduction in the threshold of security-specific dynamic price band from ±10% of the last executed price to ±5%;
- Short-selling prohibition on all securities, with exemptions for market makers for SET, MAI and TFEX.
The SET said it was confident the new measures would effectively stabilise market conditions and reinforce investor confidence.
The Securities and Exchange Commission said separately it had been closely coordinating with the exchanges, and the temporary measures would help tackle the volatility in the spot and futures segments of the stock market.