The baht also had its biggest weekly decline in a month and government bonds rose after the Bank of Thailand cut the export growth forecast, citing Europe's debt crisis.The Stock Exchange of Thailand index fell 6.14 points or 0.53% to close on Friday at 1,152.91, its lowest close since June 8, pulled down by energy and banking shares.The index lost 1.1% from the previous Friday, its first decline in three weeks. Trading value was modest at 25.99 billion baht, with 3.66 billion shares traded.Foreign investors were net sellers of 1.79 billion baht in Thai shares, reacting to global developments including the bank ratings downgrades.Local institutional investors were net sellers of 600.5 million baht in shares, while brokers were net buyers af 464 million and local retauil investors bought 1.92 billion baht.World stock markets fell on gloomy economic news. Investors were disappointed with the US Federal Reserve's decision to offer only "soft" remedies to help the economy, instead of a hoped-for third round of quantitative easing.The Fed instead will simply extend its so-called Operation Twist, selling short-term debt and using the money received to buy longer-term government debt. The goal is to push down interest rates.In Europe, 15 of the biggest global banks were downgraded by Moody's Investors Service on Thursday, adding to pressure on their financial costs and triggering multi-billion dollar collateral calls, as EU leaders prepared to weigh options for fixing the continent's debt crisis.Moody’s said the banks it singled out had "significant exposure to the volatility and risk of outsized losses inherent to capital-markets activities".Spain’s banks will need as much as 62 billion euros ($78 billion) in capital to withstand a worst-case economic scenario, according to two consulting firms hired by the government to conduct stress tests on the lenders.Big names facing higher borrowing costs as a result of the ratings downgrades include UBS, HSBC, Deutsche Bank, BNP Paribas, Credit Agricole, Royal Bank of Scotland Group and Societe Generale.Euro zone countries account for only about 10% of Thailand's exports but general global weakness is taking its toll on trade.The US dollar value of the country's exports is likely to increase by just 8% this year, compared with an earlier estimate of about 9%, according to Songtham Pinto, director of the Bank of Thailand's office of macroeconomics.The central bank's forecast is well below that of the Commerce Ministry, which is maintaining a 15% projection for export growth in 2012."Concern about Europe's debt crisis is lingering in the market, and there are growing worries about the global economic slowdown," said Kozo Hasegawa, a Bangkok-based trader at Sumitomo Mitsui Banking Corp. "Regional currencies will continue to see some selling pressure for a while."The baht retreated 1.1% this week, the most since the five-day period ended May 25. It was trading late Friday in Bangkok at 31.66/70 to the dollar, unchanged from Thursday. At one point it touched 31.85, the weakest level since June 1.The Bank of Thailand will release its May export figures next week. A Bloomberg News survey showed economists forecasting a 0.65% year-on-year rise in export value in May, compared with a decline of 3.7% in April.The central bank said foreign reserves as of June 15 totalled $174 billion, rise of $2.1 billion from the previous week. It attributed the increase to its intervention in the money market to stabilise the baht's value, through purchases on the US currency in the spot market.In other market news, the SET50 index closed on Friday at 800.07 points, down 4.82 points or 0.6%, omn turnover of 17.98 billion baht. The SETHD index of high-dividend stocks shed 12.78 points or 1.2% to 1,063.90, on turnover of 6.51 billion baht. The Market for Alternative Investment index rose 2.72 points or 0.93% to close at 288.99, with transaction value of 596.74 million baht.Among the major movers in terms of share volume was the industrial land developer MDX Plc, which slid 12% to 3.80 baht, the biggest decline since Sept 22. "There is no significant business development that may account for the recent surge in the company's share price," it said in a statement to the market. "MDX is still under normal business operation." The stock had jumped 30% on Thursday.Sri Trang Agro-Industry Plc (STA), the country's largest rubber producer, lost 2% to 14.40 baht, the lowest close since June 7. Rubber futures plunged 5.1% to end at 231.7 yen a kilogramme ($2,883 a tonne), the lowest settlement since Nov 11, 2009, on the Tokyo Commodity Exchange, reflecting growing concern about a rubber glut on world markets.The five most active stocks by value were: PTT closing at 314 baht, down 7 baht or 2.18%; PTTGC (54.50, down 1.75 baht); SCB 142.50 baht, unchanged; BBL (181 baht, down 1.50), and KBANK (159 baht, up 2.50).