The Federation of Thai Capital Market Organizations' (Fetco) Investor Confidence Index (ICI) hit an all-time high in September, helped by fund inflows, government stimulus measures and the Federal Reserve's interest rate cut.
The September ICI, which anticipates market conditions over the next three months, entered a "very bullish" zone at 176, the highest tally since the survey started, said Kobsak Pootrakool, chairman of Fetco.
Confidence among retail and institutional investors was in the bullish zone, while that of proprietary and foreign investors was in very bullish territory.
Foreign investors' ICI jumped 60% to 200, while that of proprietary, retail and institutional investors surged to 175, 147 and 140, respectively.
"The survey results in September show the confidence of investors across all types heading north," said Mr Kobsak, attributing fund inflows as the most influential factor driving the Thai stock market.
The biggest factor holding back investor confidence is international conflicts, followed by local political uncertainty and the baht's fluctuation.
The most attractive sector on the Stock Exchange of Thailand (SET) is commerce, while the least attractive to investors is automotive, he said.
The SET index continued to rise last month, thanks to the establishment of the new government, the launch of the 150-billion-baht Vayupak Fund, the state's cash handout, and the baht appreciating against the dollar.
Supportive external factors included the Fed's rate cut by 50 basis points, the first dovish move in four years, and fund inflows.
At the end of September, the Thai index closed at 1,448.83 points, up 6.6% from the previous month, with an average daily trading value of 62.5 billion baht.
Foreign investors reversed to net buyers of 28.9 billion baht, though they remained net sellers of nearly 94.8 billion from January to September.
Mr Kobsak said external factors to monitor include the US presidential election in early November and the trend of policy rate cuts in key economies such as the euro zone, the UK and Japan.
"Market observers are also monitoring China's stimulus packages and its capital market, as well as escalating tensions in the Middle East," he said.
"The local focus is on economic recovery, driven by tourism and domestic consumption, as well as the baht's volatility, which may affect exports and the central bank's next policy rate move."