Following Wednesday's rebound, the Stock Exchange of Thailand (SET) suffered a heavy sell-off as fears of an escalating global trade war were fanned by the EU's retaliation against punitive US tariffs.
Thailand's bourse closed Thursday at 1,634.44 points, down 1.8%, in trade worth 61.6 billion baht.
Foreign investors continued to be net sellers, shedding 3.8 billion baht, with brokerage firms selling 2.2 billion worth of shares. Retail investors were net buyers of 4.9 billion baht and institutional investors bought 1.16 billion.
Concerns about a global trade war flared up again as the EU launched a raft of retaliatory tariffs against US exports such as blue jeans, motorbikes and bourbon whiskey.
The move comes in response to a US decision to impose high import duties on steel and aluminium against the euro-zone bloc earlier this month.
Other Asian stock markets also experienced capital outflows, with China's Shanghai SE Composite index and Hong Kong's Hang Seng index falling by 1.37% and 1.35%, respectively.
Earlier this week, the SET tumbled for two consecutive days because of persistent negative sentiment swirling around the US-China trade row and volatile oil prices ahead of Opec's meeting scheduled for tomorrow, where it's anticipated that production output will be raised.
Win Udomrachtavanich, chief executive of KTB Securities, said foreign funds continue to move out of emerging markets for bonds and stocks, as the US Federal Reserve has signalled a faster interest rate hike pace.
Concerns over the global trade war have also kept a lid on investor confidence and lowered their risk appetite, said Mr Win.
The baht's value is expected to be 33 against the greenback in the coming period as foreign funds have exited the Thai bond market for over two months, he said.
Thailand's equity market valuation is currently quite cheap and its price-to-earnings ratio has declined to around 15 times, said Mr Win.
Terdsak Taweethiratham, senior executive vice-president at Asia Plus Securities, said market sentiment tumbled Thursday as the global trade war intensified, pressuring fund flows to shift from emerging markets into US Treasury bonds and the US dollar, considered safe-haven assets.
The SET index remains highly volatile and the bourse's support level could fall below 1,600 points given the continuous fund outflows, said Mr Terdsak.
Listed companies on the SET and Market for Alternative Investment (MAI) increased their foreign direct investment (FDI) last year, with Asean countries, particularly Cambodia, Laos, Myanmar and Vietnam, identified as investment destinations for listed firms.
Listed firms increasing their FDI last year totalled 226 SET-listed companies and 41 MAI-listed companies.
Net investment value of SET-listed companies totalled 127 billion baht, while investment sum was registered at 6.2 billion.
SET president Pakorn Peetathawatchai said large listed firms continued to invest abroad in 2017, while smaller ones increased their investment capacity.
