The Thai stock market saw some light yesterday, coming back from down 1.5% to close nearly 1% higher in response to the progress of political parties signing an MOU to form a new coalition government.
The first week after the general election on May 14 was ugly as the market lost 46 points or 3% in five trading days.
Monday, May 22 opened just like the previous week with the main bourse plunging more than 20 points or around 1.5%, breaking the crucial support level of 1,500 points as concerns over the political situation continued.
The turnaround came after the Move Forward Party, which holds the majority seats in the new government, announced that the MOU signing that will happen in the afternoon will be done without any trouble. The market bounced back in the afternoon session to close at 1,529.24 points, increased 14.35 points or 0.95%.
However, the trend returns to being downward on Tuesday right after the opening bell as it turns out buyers that lifted the market up yesterday were institutional investors that bought the dips after the market rout. Yesterday’s data showed that local investors and foreign investors continued to withdraw from Thai stocks with a net sell of 2.8 billion baht. Since the general election, foreign investors have been selling Thai equities for six-straight days with a total value over 12 billion baht.
The rise yesterday was nothing but a false hope that mended the wound just for over the night. The Thai stock market continued its down trend on Tuesday, shedding 6.44 points or 0.42% to 1,522.80 points before the closing of the afternoon break.
Analysts noted the investors should keep a close eye on the progression of forming the new coalition government, while concerns over the negotiation to raise the debt ceiling in the U.S. continued to pressure global markets.
