Thai share prices closed 1.57 percent lower on Tuesday as investors fretted over a further spike in US interest rates following a tough speech by the US Federal Reserve chief, dealers said.
They said investors dumped shares amid speculation that the Bank of Thailand would decide to raise its key interest rate by a quarter point to 5.0 percent to tame rising inflation at Wednesday's rate-setting meeting. The Stock Exchange of Thailand (SET) composite index dropped 11.18 points to 702.04, while the blue chip SET 50 index lost 8.47 points to 486.83.
Losers outnumbered gainers 268 to 66 and 91 stocks were unchanged with 1.7 billion shares worth 10.3 billion baht (271 million dollars) traded.
The Thai baht on Tuesday closed at 38.16-18 to the dollar, compared with Monday's close at 38.09-11. Against the euro, the Thai currency closed at 49.17-22 from 48.78-49.00.
"The market fell in line with falls on Wall Street and in regional markets and selling was mainly due to concern over US interest rates," said Sukhbir Khanijoh, a senior market analyst at Trinity Securities.
Investors were spooked by the prospect of a slump in the US economy after Federal Reserve chairman Ben Bernanke warned in a speech Monday that inflation remained a threat and action could be needed to keep it in check.
"Investors interpreted the speech as a sure sign that the Fed would increase interest rates," said Thanomsak Saharatchai, a senior market analyst at Capital Nomura Securities.
Sukhbir added the Thai market also dropped amid concern over weak consumer spending and sluggish corporate profits as a result of higher interest rates.
Shares in Thailand's top energy firm PTT fell 4.00 to 240.00 baht and its subsidiary PTT Exploration and Production was unchanged at 111.00.
Thailand's top lender Bangkok Bank lost 3.00 to 102.00, and Kasikorn Bank, the third-largest bank, declined 2.00 to 59.00.
Thai Airways International fell 2.25 to 41.25.
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