However, after their worst start to the year since 1988, Thai stocks are now so cheap that foreign investors are buying. Local retail investors are also hunting for bargains while local brokers and institutions have been selling.
Optimists in the market point out that the SET has rebounded substantially following two previous crises: the 2006 coup and the 2010 political violence.
The Stock Exchange of Thailand Index declined 6.15 points from Thursday to close at 1,224.62, a decrease of 5.7% from the previous Friday's close of 1,298.71. Turnover was 38.07 billion baht, with 5.26 billion shares traded.
On the first two trading days of the new year, the local market is down 5.7% from the end of 2013.
Foreign investors were net buyers on Friday of 470.8 million baht worth of Thai shares, bringing their net buying for the first week of the year to 595.4 million baht. They sold 198 billion baht more in Thai stocks than they bought last year.
Local institutions were net sellers of 950.69 billion baht and brokers sold 1.7 billion from their own portfolios. Individual investors were net buyers of 2.18 billion baht.
Among the big foreign buyers this week was Aberdeen Asset Management, which took advantage of the worst start to a year for Thai stocks since 1988. Thursday's 5.2% drop in the SET Index left the market valued at 10.8 times earnings estimates for the next 12 months, the cheapest since June 2012, according to data compiled by Bloomberg. The gauge's 14-day relative strength index sank to 19.91, below the 30 threshold that some traders use as a signal to buy. The last time it fell this low, in October 2008, the SET rallied 20% in two weeks.
"I was very busy buying stocks yesterday," said Adithep Vanabriksha, the Bangkok-based chief investment officer for Thailand at Aberdeen, which oversees about $324.6 billion worldwide.
"I still strongly believe that the current political crisis will be resolved in a peaceful way and the stock market will rebound."
Aberdeen favours energy stocks, including PTTEP, along with power producers, healthcare providers, phone companies and insurers, said Mr Adithep.
Thai stocks have rebounded after past periods of political tension. While the SET Index lost 13% in the four months after the September 2006 coup, it recouped its losses by May 2007.
The SET lost 11% amid the protests in the first half of 2010, then rallied 46% during the following 12 months.
Most other Asian markets slipped on Friday after Wall Street's three main indices began the new year in the red on profit-taking following a solid 2013.
Weak services sector data from China also contributed to falls in the Hong Kong and Shanghai stock markets. Hong Kong lost 2.24% to 22,817.28 points and Shanghai was off 1.24% at 2,083.14, after official figures showed an index of China's services saw growth slow in December.
Sydney declined 0.33% to 5,350.1 and Seoul fell 1.07% to close at 1,946.14. In India the Sensex was 0.44% lower after Prime Minister Manmohan Singh said he would leave office after polls due this year even if his embattled Congress party wins a third term.
Tokyo was closed for a public holiday.
In Bangkok, the SET50 index of blue chips ended at 829.89 points, down 3.40 points, with total trade value of 32 billion baht. The SETHD index of high-dividend shares fell 10.69 points to 1,021.45, with turnover of 13.2 billion baht. The Market for Alternative Investment lost 4.61 points to 337.88, with transaction value of 302.9 million baht.
The five most active shares by value were ADVANC, rising 9 baht to 196 baht on foreign buying; KBANK, up 5.50 baht to 151; SCB, up 1 baht to 132.50; INTUCH, up 1.50 baht to 65.50; and TRUE, down 10 satang to 6.70 baht.
In the currency markets, the baht crossed 33 to the dollar and traded near the lowest level since June 2010 as local stocks tumbled amid concern about worsening political unrest.
"People are still held in suspense trying to figure out how this will resolve itself," said Leong Sook Mei, Southeast Asian head of global markets research at Bank of Tokyo-Mitsubishi UFJ. The baht may fall to 34 by June, she said.
The baht was trading late Friday in Bangkok at 33.00/02 to the dollar, compared with 32.95/97 on Thursday and 32.86/88 a week earlier.