Thailand’s benchmark stock index fell the most in more than two years as foreign investors cut holdings of the nation’s assets amid speculation the U.S. Federal Reserve will rein in its monetary stimulus.
The benchmark SET Index slid 5 percent to close at 1,452.63, the biggest drop since October 2011. The gauge has lost 12 percent since reaching its highest level since 1994 on May 21, exceeding the 10 percent level that some investors define as a correction. The baht weakened to an eight-month low and government bonds declined.
PTT Pcl, the nation’s biggest company by market value, slumped 3.9 percent and Advanced Info Service Pcl, the second largest, dropped 6 percent. Global funds sold $744 million more Thai equities than they bought this month through yesterday and pulled a net $143 million from Thai sovereign debt, official data show.
“Overseas investors want to take money out from Thailand’s stocks and other financial assets at any price,” said Kavee Chukitkasem, an investment strategist at Kasikorn Securities Co. in Bangkok. “The money flow has reversed to outbound from inbound earlier this year even as the country’s overall economic and earnings growth remain sound.”
The U.S.’s AA+ credit rating outlook was increased by Standard & Poor’s yesterday, boosting the odds that the Fed will reduce its bond-buying program. Foreign investors have sold a net $1.3 billion of Thai shares, $1.2 billion in Indonesia and $70 million in the Philippines since May 22, when Fed Chairman Ben S. Bernanke said the central bank could consider paring stimulus if the U.S. labor market improves.
The recent declines pared the SET gauge’s gain this year to 4.4 percent, after the measure surged 36 percent in 2012. The stock gauge’s 14-day relative strength index fell to 30.8, data compiled by Bloomberg show. A reading below 30 signals to some technical analysts a security may gain.