The SET Index fell to a low of 723.67 points, breaking the previous support level of 728 points, during the day's trading before rebounding to close at 726.37 points, or down 1.03 per cent - an almost three-week low.

A  KGI Securities (Thailand)  source said there were no domestic factors hammering Thai stock prices, but European funds had sold Asian stocks, including Thailand's. Foreign net selling yesterday was accounted at Bt1.38 billion.

SET executive vice president Vichate Tantiwanich said yesterday the news that Total Access Communication (DTAC) would postpone its scheduled listing on the Thai bourse had also negatively affected investment sentiment for the SET. He said this would also affect the SET's target for boosting total market capitalisation up to the GDP level, or to more than Bt7 trillion, in the medium term, from about Bt5 trillion currently.

Thanawat Pachimkul, head of research at DBS Vickers Securities, echoed the KGI source, saying bad sentiment for the entire Asian market affected the Thai market yesterday.

In addition, he said Japan's stock market was also hit hard by lower-than-expected bank earnings. However, there was no change in domestic factors, both economic and political. So far, Thai banking stocks have also risen to their full value over the past few weeks. Thus, investors have taken profits on large capitalisation stocks.

The baht has also weakened slightly over the past few days after strengthening 11 per cent this year. Yesterday, the Thai currency closed at Bt36.59 to the US dollar.

Thanawat predicted that Thai economic fundamentals would be positive for the stock market next year, because interest rates and oil prices were set to decline, while the political situation was quite settled.

He said he anticipated an index target of 806 points next year, although the energy sector would not perform very well, due to falling oil prices.

Another stock analyst from a local brokerage house said investors had taken profits from Thai stocks, while there was no good news for the Thai stock market currently.

"No good news for economics," said the source. "The Open House forum in which five ministers clarified their policies has not provided any concrete outcome. And our political situation is still not settled enough."

Siriporn Chanjindamanee

The Nation