SET falls 3.59%

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The Thai stock market might set a new low at 330 points if the index fails to stay above the 400-barrier level within the remaining period this year, an analyst warned.

The Nikkei 225 dropped 570.18, or 6.9 per cent, to close at 7,703.04 in Tokyo, the lowest since October 28 and the 10th steepest decline since 1970. South Korea's Kospi index fell 68.13, or 6.7 per cent, to finish at 948.69 in Seoul, the lowest level since October 27. Hong Kong's Hang Seng Index fell 517.24, or 4 per cent, to 12,298.56, its worst close since October 27. Other major stock markets in the Asia region fell around 14 per cent.

The SET index started the day with a sharp decline. It sank to the day's trough at 390.17 points before rebounding slightly to close the market at 393.85, or a 3.59 per cent decline. Turnover was thin at Bt8.9 billion.

PTT Plc (PTT), Thailand's largest market cap stock, sank 5.3 per cent, to Bt142,  its lowest close since October 29. Banpu Plc (BANPU) dipped 4.57 per cent to Bt167, PTT Exploration and Production Plc (PTTEP) lost 2.87 per cent at Bt84.50, Advanced Info Service Plc (ADVANC) was off 5.19 per cent at Bt73, Kasikornbank (KBANK) dropped 4.19 per cent to Bt45.75 and Bangkok Bank (BBL) fell 4.44 per cent to Bt64.50.  

The MSCI Asia Pacific Index slumped 5.2 per cent to 75.09 at 3.51 pm in Tokyo, extending this week's decline to 9.6 per cent. Sixteen stocks fell for each that rose on the measure. MSCI's Asian index has erased a 25 per cent rally it posted since October 27, when it last closed at a fiveyear low, as recessions in Japan and Hong Kong and lower profit forecasts wiped out optimism sparked by global interest rate cuts and Barack Obama's presidential victory in the US.

The Dow Jones Industrial Average tumbled 427.47 points (5.07 per cent) to finish at 7,997.28. It was the first time the bluechip index closed below 8,000 since March 31, 2003.

The techheavy Nasdaq skidded 96.85 points (6.53 per cent) to 1,386.42, its lowest level since April 14, 2003. And the broad Standard and Poor's 500 index retreated a hefty 52.54 points (6.12 per cent) to 806.58, another fiveandahalfyear low.

KGI Securities (Thailand) Vice President Research Department Adisak Kammool said the uncertainty on whether the US government would bail out the three US auto firms - GM, Chrysler and Ford -  had put pressure over Wall Street and other stock markets across the world.

US consumer prices plunged 1 per cent last month, the most since records began in 1947, raising the risk of defla¬tion, while housing starts tumbled to a record low. Federal Reserve policy makers last month predicted the US economy would contract through the middle of 2009, with some prepared to cut interest rates further in response, records released yesterday show.

One was killed and around 20 were injured  in a bomb blast inside the Government House complex, which the People's Alliance for Democracy (PAD) has occupied for months, mounting jitters over thelocal political situation.

PAD yesterday announced that it wouldmobilise antigovernment protesters this Sunday which could lead to a fresh anxiety over violence.

"However, the SET index's fall is less than others today. I believe foreign investors' selloff would continue. They between 20052007 bought Thai shares with a net amount of Bt257 billion and they already sold them with a net value of Bt143 billion, leaving over Bt100 billion," Adisak said.

Should the SET index swing back to above the 400-level within this year, it will surge to 460 points but if not, it will slump to 330 points where price to equity (P/E) ratio is at 5 times, he said.

A local broker recommended  thatinvestors hold cash due to a spate of negative factors.