The Thai stock market, once one of the world's star markets in 2026, is sending worrying signals again. Although the SET Index remains above 1,600 points and has returned nearly 28% since the start of 2026, investors are beginning to focus on the changing direction of foreign capital flows.
Recently, Thai stocks benefited from a continuous inflow of foreign capital amid tensions in the Middle East, leading Thailand to be seen as a regional "Safe Haven" and a key driver for the strong market rally.
However, as geopolitical risks ease, this picture has quickly changed. The first clear sign was foreign investors starting August with heavy net selling.
Looking at the bigger picture since early 2026, foreign investors remain a key market driver, with the SET Index rising to 1,609.78 points, up 350.11 points or 27.79% from the start of the year, reflecting one of the best global market performances this year.
Detailed accumulated trading data since early 2026 show foreign investors as the largest net buyers at 68.2 billion baht, while domestic retail investors net bought 9.12 billion baht and proprietary trading accounts net bought 11.4 billion baht.
On the other hand, domestic institutional investors were the only group with significant net sales of 88.7 billion baht, indicating foreign buying was the main factor pushing the SET Index during the first seven months.
However, the weight of capital flows began to signal a reversal in early August. In just the first three trading days, foreign investors net sold over 7.73 billion baht of Thai stocks.
On 5 August alone, net selling hit 6.07 billion baht, with TRUE among the most heavily sold stocks.
This reflects that although foreign capital has not yet exited the Thai market for the year overall, short-term momentum has shifted from "accumulating" to "profit-taking" after the strong rise in the first seven months.
Asia Plus Securities' research team notes that despite Thai stocks being among the world's best performers in the first seven months, the market's allure for Fund Flow is fading. Easing geopolitical risks, especially in the Middle East, have reduced Thailand's role as a Safe Haven, leading to gradual foreign capital outflows.
They also assess that Thai stock momentum is slowing and capital is likely shifting more to US stocks. The Relative Rotation Graph (RRG) shows Thailand moving from a Leading to a Weakening phase, indicating diminishing chances of outperforming global markets, while US stocks are regaining investor interest.
Meanwhile, Thailand's low bond yields, while easing corporate financing costs, reduce foreign investment appeal. Combined with risks from a weakening baht and domestic political factors weighing on investment sentiment, Fund Flow into Thai equities is likely to be harder in the short term. Without new positive catalysts, the index's upside could become limited.
Dao Securities analysts share a similar view, noting the key issue for August is Fund Flow movements after foreign investors sold over 7.7 billion baht of Thai stocks.
This aligns with capital outflows across several regional markets. However, the scale of foreign selling in Thailand is higher than many countries, warranting close monitoring to see if this is a short-term sell-off or the start of a capital flow reversal.
Nevertheless, if the index weakens near support levels, it may be an opportunity to gradually accumulate stocks with strong earnings rather than panic over short-term foreign selling.
Bualuang Securities analysts advise using volatile market conditions to gradually accumulate fundamentally strong stocks under a "sell on green, buy on red" strategy, focusing on those with expected profit growth, upgraded earnings forecasts, and potential support from foreign Fund Flow. Recommended stocks include BBL, CPALL, CPAXT, ADVANC, and BH.
Dao Securities recommends closely monitoring foreign Fund Flow and using index pullbacks as trading opportunities to accumulate fundamentally strong stocks with unique catalysts and continuous earnings growth. Recommended stocks include CPALL, AOT, BDMS, GULF, and TRUE.
Asia Plus Securities suggests reducing index chasing and focusing on stocks tied to domestic economic recovery such as CPALL, CRC, DOHOME, BA, ERW, CENTEL, THAI, BDMS, BH, MTC, SAWAD, and TIDLOR. They also advise investors to hold gold as a portfolio hedge.
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