Thai stocks extended their losses, falling below the support line to an intra-day low of 1,580.80 points before recovering to finish at 1,619.10 points, as investors fear the protracted Russia-Ukraine war and soaring oil prices will fan inflation and stunt global economic growth.
The SET Index dropped 7.60 points or 0.47% from the previous day with trading value of 150 billion baht.
Brent crude oil stood at US$125.78 as of 3.30pm yesterday. The price of gasoline and gasohol in Bangkok and surrounding provinces rose 60 satang per litre yesterday amid the battle between Russia and Ukraine.
Therdsak Thaveetheerathum, deputy director of the research division at Asia Plus Securities (ASPS), said the dramatic drop in the SET Index was due to investors' growing worries over the impact of a potential US ban on Russian crude oil imports.
He said the prolonged conflict between Russia and Ukraine will remain the main factor pressuring the global economy as many negotiations have failed with no truce in sight.
Foreign news agencies reported Russia warned oil prices could hit $300 a barrel if the US and European countries ban oil imports from the country, which is the world's second largest crude oil producer after Saudi Arabia.
In related news, the Stock Exchange of Thailand said yesterday the Thai bourse saw large capital inflows during first two months of the year as foreign investors were attracted by better than expected performance and earnings reports from 64 listed companies.
In addition to internal factors, the dispute between Russia and Ukraine also encouraged foreign investors to shift from markets expected to suffer a huge blow from the conflict, such as Europe, to safer bourses within Asean.
Soraphol Tulyasathien, deputy manager and head of corporate strategic planning at the SET, said the Thai economy is less connected to Russia and Ukraine, meaning it will be less affected by the war and inflation in the short term and more likely to recover quickly.
He said listed companies, especially those in the service and tourism sectors, are expected to benefit from the country's reopening.
The prospect of a rebound this year has helped attract fund flows to the Thai bourse for three consecutive months, said Mr Soraphol.
According to the SET, foreign investors have bought a total of 61.3 billion baht of shares in February, the highest net purchase value for foreign investors in 16 years.
The SET Index closed at 1,685.18 points in February, up 2.2% from the previous month, in line with other Asean stock indexes.
The SET Index in the first two months of this year was primarily driven by industries benefiting from the reopening of the country. Industries that outperformed the SET Index compared with the end of 2021 were services, resources and finance.
In February, the average daily turnover in the SET and Market for Alternative Investment was 99.1 billion baht, up 5.0% from the same month last year.
Foreign investors accounted for the highest turnover at 42.8% of the total. Last month was the first since February 2020 that foreign investors recorded net buying for three consecutive months.
The Thai bourse's forward price-to-earnings ratio at the end of last month was 18.1 times, higher than the Asian stock market average of 13.5 times.
The bourse's historical price-to-earnings ratio was 13.0 times, lower than the Asian stock market average of 16.0 times.
The dividend yield was 2.64%, above the Asian stock market average of 2.36%.
