The Thai stock market has closed lower now in three straight sessions, retreating more than 25 points or 2.3 percent along the way. The Stock Exchange of Thailand finished just shy of the 1,150-point plateau, and now investors are bracing for more pain when the market opens on Tuesday.
The global forecast for the Asian markets remains negative on lingering concerns about the ongoing European debt crisis. Spain has now formally asked for a bailout to shore up its ailing banking sector, and it was quickly followed by a similar request from Cyprus. In addition, Moody's downgraded 28 Spanish banks - although better than expected economic data from the U.S. may provide support. The European and U.S. markets finished sharply mower, and the Asian bourses are also expected to open in the red.
The SET finished modestly lower on Monday as losses from the energy producers were offset by gains from the financial shares.
For the day, the index fell 5.48 points or 0.48 percent to finish at the daily low of 1,147.43 after peaking at 1,158.12. Volume was 3.125 billion shares worth 18.099 billion baht. There were 278 decliners and 189 gainers, with 151 stocks finishing unchanged.
Among the actives, energy giant PTT was down 1.27 percent, while PTT Global Chemicals shed 0.46 percent, Siam Concrete plunged 3.11 percent. Coal miner Banpu dropped 2.23 percent, Bangkok Bank added 0.55 percent, Kasikornbank collected 0.94 percent and Siam Commercial Bank was unchanged.
The lead from Wall Street suggests continued consolidation as stocks moved sharply lower during trading on Monday after seeing considerable volatility last week. Lingering concerns about the ongoing European debt crisis weighed on the markets amid worries about the impact on the global economy.
The sell-off came as traders kept a close eye on the latest developments in Europe, where Spain formally asked for a bailout to shore up its ailing banking sector. Europe is likely to remain in focus throughout the week, as European leaders are due to hold a summit to discuss the ongoing debt crisis on Thursday and Friday.
Meanwhile, traders largely shrugged off a report from the Commerce Department showing a bigger than expected increase in U.S. new home sales.
The report showed sales of new single-family homes at a seasonally adjusted annual rate of 369,000 in May, a 7.6 percent increase from the revised April rate of 343,000. Economists had expected new home sales to climb to 350,000. With the much bigger than expected increase, new home sales in May came in at their highest level since April of 2010.
After moving sharply lower in early trading, the major averages remained stuck firmly in the red throughout the session. The Dow fell 138.12 points or 1.1 percent to finish at 12,502.66, while the NASDAQ tumbled 56.26 points or 2 percent to end at 2,836.16 and the S&P 500 slid 21.30 points or 1.6 percent to 1,313.72.
In economic news, Thailand's merchandise trade deficit dropped to $1.74 billion in May from $2.87 billion in April, the Ministry of Commerce said on Monday. Economists were looking for a trade deficit of $1.2 billion. Exports of goods increased 7.68 percent on an annual basis to $20.93 billion in May, significantly faster than the 0.65 percent gain economists forecast. At the same time, imports surged 18.17 percent annually to $22.67 billion. Economists expected the value of arrivals to grow 8 percent.
Also, the central banks of Singapore and Thailand have signed a Memorandum of Understanding to improve liquidity and promote financial stability. Under this arrangement, financial institutions operating in Singapore may obtain Singapore dollar liquidity from the Monetary Authority of Singapore by pledging Thai baht or Thai government and central bank securities. Likewise, eligible financial institutions operating in Thailand may obtain Thai baht liquidity from Bank of Thailand by pledging Singapore dollar or Singapore government and central bank securities.
by RTT Staff Writer
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