Bangkok Stocks Plunge: Global Trade Fears Trigger Market Crash
Bangkok—Thailand’s benchmark Stock Exchange of Thailand (SET) Index plunged into bear market territory on Friday, February 28, 2025, reflecting growing investor anxieties about the economic future of Southeast Asia’s second-largest economy. The index fell as much as 2.4%, marking a dramatic 20% decline from its October peak. This sharp drop underscores deepening pessimism surrounding Thailand’s economic prospects, hampered by sluggish growth and escalating global trade tensions.
The midday close showed the SET settling at 1,195.26 points, a significant decrease of 20.47 points (1.68%). Trading volume reached 29 billion baht, indicating heightened investor activity in response to the market downturn. Heavyweights such as Delta Electronics Thailand Plc and Airports of Thailand Plc were among the hardest hit, significantly contributing to the overall index decline.
This downturn follows a sustained period of foreign investor divestment from what is now considered Asia’s worst-performing equity market in 2025. Over the past two years, foreign investors withdrew almost $10 billion, signaling waning confidence in the Thai economy. This trend continued into 2025, with a net outflow of $381 million as of Thursday, according to Bloomberg data.
Underlying these market jitters is the fear that Thailand’s economy, which already underperformed growth targets the previous year, will be further hampered by the protectionist trade policies of then-US President Donald Trump. His threats of tariffs on various nations cast a long shadow over international trade, unnerving investors in export-dependent economies like Thailand.
Pon Van Compernolle, managing partner at RVC Emerging Asia Fund, voiced a prevalent concern: «The continued weakness in the SET is driven by the weak Thai economy, as government policies over the past decade have not led to any structural improvements.» He added that this market downturn reveals a «lack of faith in the capital markets,» fueled by an ongoing sell-off by both foreign and local institutional investors.
Thailand’s vulnerability is exacerbated by its asymmetrical trade relationship with the United States. Thailand imposes higher import levies on US goods than vice versa, making it susceptible to retaliatory tariffs from Washington. Government agencies are actively exploring measures to safeguard Thailand’s trade interests. Prime Minister Paetongtarn Shinawatra has called for increased cooperation between the Bank of Thailand and the Ministry of Finance to bolster economic growth and navigate these challenging circumstances.
The decline in Thai stocks is part of a broader regional sell-off, as Trump’s tariff threats weighed heavily on investor sentiment. Indonesia’s benchmark stock index also experienced a significant drop, pushing it toward a bear market. This widespread decline dragged the MSCI ASEAN index down more than 10% from its September high, demonstrating the far-reaching impact of global trade uncertainties. The situation highlights the interconnectedness of global markets and the vulnerability of emerging economies to external shocks. The long-term implications of this downturn remain uncertain, leaving investors and policymakers facing the challenge of fostering stability and restoring confidence in the Thai market.
