Thai shares closed 1.12 percent lower on Wednesday amid growing concern over rising inflation, dealers said. They said banking and property stocks led the decline, while volatile oil prices and worries about political instability added to the negative sentiment in the market.
The Stock Exchange of Thailand (SET) composite index lost 8.58 points to close at 760.01 points, while the blue chip SET 50 index fell 7.19 points to close at 541.76. Losers outnumbered gainers 265 to 76 with 106 stocks unchanged on turnover of 3.61 billion shares worth 12.87 billion baht (385.12 million dollars).
The Thai baht slightly strengthened against the dollar, closing at 33.40-42 baht on Wednesday from Monday's 33.42-45 baht. Thai markets were closed for a bank holiday on Tuesday. The Thai unit also gained against the euro and finished at 52.70-75 baht from 52.85-90 baht.
"The market fell today and trading was very thin as investors worried about rising inflation," said Wichai Lertsupongkit, senior vice president at Thanachart Securities. Pichai said Tuesday's commerce ministry report putting inflation at a new 10-year high of 8.9 percent in June was higher than expected.
"We now expect that the high inflation rate will drive the central bank to inevitably raise interest rates soon, by at least one percent over the next 12 months," he said. The central bank has kept its benchmark interest rate at 3.25 percent since August. Share prices fell, led by banking and property counters. "Persistent factors like instability in Thai politics, high oil prices and fears about an economic slowdown just worsen the market sentiment," Pichai said.
Thailand's biggest energy firm PTT gained 2.00 baht to close at 304.00 baht while its subsidiary PTT Exploration and Production lost 2.00 to 191.00. Another major energy firm, Banpu, rose 4.00 to 532.00. The kingdom's biggest lender, Bangkok Bank, fell 4.00 to 115.00. Kasikorn Bank lost 2.50 to 68.50, while Siam Commercial Bank also dropped 2.50 to 75.00. Thai Airways International edged down 0.70 to close at 20.40.