Thai stocks ended higher for a fourth straight day on Monday with funds picking up battered blue-chips such as Siam Cement and Bangkok Bank, analysts said.
The benchmarks Stock Exchange of Thailand (SET) composite index ended up 0.87 points, or 0.14 percent, at 614 points.
The big-cap SET 50 rose 0.7 percent to 41.79 points. Turnover fell to 10 billion baht ($244.8 million) from 11 billion baht on Friday. "Near the market close, funds entered to support almost all the blue-chip stocks," said Asia plus Securities analyst Saengtham Jaranachaikul.
Shares in number one Bangkok Bank rose 3.45 percent to 90 baht, helping the banking sector gain 1.05 percent. Most other big-cap banks also ended higher. Shares in Siam Cement, Thailand's biggest industrial conglomerate, jumped 5.77 percent to 208 baht, while national carrier Thai Airways surged 6.6 percent to 56.50 baht.
The market had spent most of the afternoon in negative territory amid speculation that Beijing would raise interest rates after Chinese inflation accelerated.
"Fears of a Chinese interest rate hike caused regional markets, including ours, to lose their balance in the afternoon session," said Kiatnakin Securities analyst Vireo Lapromrattana.
Chinese stocks fell to six-month lows on Monday, dragging markets in Taiwan and Hong Kong lower.
Analysts said even though the market had already factored in China's move to slow its economy, speculation over the first interest rate hike in China in nearly a decade reinforced fears of a rising trend in borrowing costs.
The US Federal Reserve is expected to raise its policy rate by at least 25 basis points at the end of this month. "The market is going to be volatile with a weaker bias tomorrow because of higher interest rate worries," Vireo said.
Resistance on Tuesday is expected at 620 points and support at 600 points. Speculative buying of finance stocks by retail investors also helped the market. Shares in Asian Credit Securities PCL jumped to a six-week high of 8.50 baht amid speculation that a possible sell-out by major shareholders could put the company in play.
"Investors are speculating on the stock because it is a new acquisition target," said Hataiporn Jirajariyavech at KGI Securities. Asian Credit closed up 6.45 percent at 8.25 baht.
But shares in Bangkok First Investment and Trust, which is in the process of merging with a unit of merchant banking group Finns to become a bank, plunged 10.53 percent to 29.75 baht.
Analysts said investors were cashing in because the stock had doubled in price over the last month.