Thai shares fell for a third straight day on Tuesday, in tune with overseas markets worried about security issues in the wake of the Madrid bombs, but they did bounce off the day's low.
Investors cashed out of big cap shares after signs emerged Al Qaeda may have been behind the bombs and worries about the delay in listing shares in the state-run Electricity Generating Authority of Thailand weighed on the market, analysts said.
"The selling momentum continued from yesterday, especially from foreign investors," said strategist Thanarat Isaragult of Bualuang Securities.
"There were many negative factors on the market, including the delay of the EGAT listing and the sentiment on foreign bourses."
The benchmark Stock Exchange of Thailand (SET) composite index fell 8.62 points, or 1.27 percent, to 669.8 points. The big-cap SET 50 index dropped 1.47 percent to 44.2 points and turnover rose to 21.8 billion baht ($552.7 million) from 19.6 billion baht on Monday.
Asian markets were mostly in the red after a sell-off on Wall Street. Stocks in Japan, Singapore and South Korea were all lower.
The Thai market did recover somewhat after hitting the day's low of 665.38 points as bargain hunters started buying when the 14-day relative strength index (RSI) suggested the market was oversold.
The index was at 23.5 at the end of Tuesday's trade. An RSI level of 30 and below indicates the market is oversold. "We started to have buying orders from foreign clients who thought that below 680 points Thai share prices were cheap, which was quite a good sign," said Adipong Puttarawigorn, head of investment strategy at SCB Securities.
The Thai stock market is one of Asia's worst performers this year with a 13 percent drop after a huge rally last year, when it was the world's best performing bourse with a 116 percent surge, prompted fears of overheating.
Foreign investors have sold Thai stocks worth a net 31.75 billion baht so far this year, more than in the whole of 2003.
Adipong said he expected the market to trade in the same range again on Wednesday with resistance of 677 points and support at 665 points.
PTT, Thailand's biggest oil and gas firm, was the most actively traded stock and fell 2.53 percent to 155 baht ahead of it going ex-dividend on Wednesday, triggering a sell-off by investors who preferred capital gains over dividends, he said.
Bargain hunters picked up battered brokerage shares on expectations a meeting between the new Finance Minister Somkid Jatusripitak and stock market regulators on Wednesday may come up with new measures to revive market sentiment, analysts said.
Shares in number two broker Seamico Securities, the second most actively traded stock, rose 2.59 percent to 11.9 baht while the number one, Kim Eng Securities, rose 1.9 percent to 53.5 baht.
The finance sector index was up 0.29 percent. Shares in Airports of Thailand PCL ended the day 0.55 percent lower at 45.25 baht after rising to 45.75 baht in early trade after Morgan Stanley Capital International Inc (MSCI) said it would add them to its index series from March 25.
Shares in Thailand's number three cement maker TPI Polene PCL fell 2.2 percent to 33.75 baht despite its plan to wipe out 19 billion baht ($482 million) of retained losses by the end of the current quarter ending June 30, enabling it to pay dividends.