The investor confidence index (ICI) tallied by the Federation of Thai Capital Market Organizations (Fetco) remained in the bearish zone last month, weighed down by global trade tensions, geopolitical conflicts and the domestic political situation.
The April ICI, which reflects expectations for the stock market over the next three months, was in bearish territory at 64.1, with government stimulus the most supportive factor.
Trade wars, international conflicts and domestic political concerns continue to undermine overall sentiment.
The confidence of retail, proprietary and foreign investors was in the bearish zone, while the outlook of institutional investors was bullish.
"In April, the Thai capital market fluctuated due to several factors including US tariffs, the slow recovery of the local economy and a diminished tourism revival, as well as Moody's revision of Thailand's outlook to negative from stable," said Fetco chairman Kobsak Pootrakool.
However, the Monetary Policy Committee's decision to cut its policy rate by 25 basis points to 1.75% helped offset some losses, he said.
Despite macroeconomic headwinds, the Thai stock market posted a mild rebound last month.
The Stock Exchange of Thailand index finished at 1,197.26 points at the end of April, gaining 3.4% from March, with an average daily trading value of 42 billion baht.
Foreign investors remained net sellers, pulling out 14.6 billion baht in April and 54.6 billion year-to-date.
The most attractive sector remains banking, while automotive is the least attractive, said Mr Kobsak.
He said external factors to monitor include the trajectory of US trade policy, particularly retaliatory tariffs from major economies, the global economic slowdown, and the conflicts between Russia and Ukraine as well as India and Pakistan.
Domestically, investors are eyeing US-Thailand trade negotiations and a potential boost to the market from a shift in tax-incentivised investments.
From May to June, investors can switch from long-term equity funds to new Thai ESG Extra Funds to claim tax benefits, a move expected to drive inflows into the market, said Mr Kobsak.