Thai stocks fell sharply to a one-month low on Thursday, in line with losses on global markets, after China said it needed forceful measures to cool its red-hot economy, sparking selling of shares in shipping and exporters.
The losses also extended weakness from Wednesday after security forces shot dead over 100 gun- and machete-wielding militants.
The benchmark Stock Exchange of Thailand (SET) composite index fell 15.96 points, or 2.37 percent, to 656.38 points, its lowest close since March 31.
The big-cap SET 50 was down 2.38 percent at 44.30 points, while turnover rose to 18.9 billion baht ($477.4 million) from 14.9 billion baht on Wednesday.
China's Premier Wen Jiabao told Reuters on Wednesday China, the world's sixth-biggest economy, needed to take "effective and very forceful measures" to keep over-investment and inflationary pressures in check.
Shipping firms, whose performances are tied to exports, were Particularly hard hit. Precious Shipping shed 7.64 percent to 33.25 baht, while Thoresen Thai dropped 5.07 percent to 32.75 baht.
"Markets around the world are down as China is looking for a soft landing," said another Kim Eng Securities analyst Surachai Pramualcharoenkit. "Once they talked about policies, markets were concerned."
Chemical stocks fell 4.18 percent on Wen's comments. China is the region's main importer of petrochemicals.
Shares in Thai Olefins, the bourse's biggest chemical stock by market capitalisation, slipped 5.98 percent to 55 baht, and shares in polyvinyl chloride (PVC) maker Vinythai fell 4.05 percent to 14.20 baht.
Sahaviriya Steel slipped 1.85 percent to 26.50 baht as Wen said China would clamp down on steel to keep industrial expansion in check.
Shares in construction firms fell after Sino-Thai Engineering & Construction, one of Thailand's top contractors, lowered its net profit forecast by 20 percent on Wednesday.
The firm said it expected margins to narrow due to higher material prices, a problem seen hitting the whole sector.
Sino-Thai shares fell 3.95 percent to 14.60 baht, while rivals Italian-Thai Development and Ch Karnchang dropped 6.54 percent to 10 baht and 6.16 percent to 13.70 baht respectively.
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