The Stock Exchange of Thailand Index lost 15.58 points on Friday to close at 1,281.81, down 2% from the previous Friday's close of 1,307.71. Turnover was 33.73 billion baht, with 5.92 billion shares traded.
"Investors have big concerns about the global economic slowdown," said Kasem Prunratanamala, head of research at CIMB Securities (Thailand).
"Earnings of most large companies are a bit disappointing. The weak economy and consumption will continue to give companies a tough time."
The US Commerce Department announced that third-quarter gross domestic product expanded by 2.0% from a year ago, better than forecasts for 1.8% growth and up from 1.3% in the second quarter. However, economists believe the fourth quarter will be weaker.
As well, some investors are already moving to the sidelines until they see the outcome of the US election on Nov 6.
Poor results from Amazon and Apple, two belwethers of US consumer spending, also have disappointed investors.
SET president Charamporn Jotikasthira said the equity market remained highly volatile as the global economic slowdown still has no definitive solution.
However, he added that local factors such as the latest cabinet reshuffle and controversy over the 3G auction appeared to be having little bearing on sentiment. This showed that Thai listed firms' overall fundamentals were strong, he said.
If the SET Index fell sharply it would be an opportunity for investors to buy stocks because the Thai economy and listed firms' performance were still strong, he said.
Kongkiat Opaswongkarn, the CEO of Asia Plus Securities, said investment in the stock market would likely slow down ahead of the US election.
If Republican Mitt Romney is elected, he said, investors might be concerned about US policy changes. Mr Romney vows to create new jobs for Americans and might take a harder line on China to do so. A decline in China-US trade would hurt other countries in Asia.
Dr Kongkiat suggested investors diversify assets into overseas markets such as China and the US where bourses have dropped over the past years and are now recovering.
For Thai stocks, he recommend selective buys of some high-growth stocks with low prices.
Sukit Udomsirikul, managing director of Maybank Kim Eng Securities, said global factors were dominating the local equity market at present.
Foreign investors have been net sellers of Thai shares for most of the week, including 1.14 billion baht on Friday, as they expect US third-quarter economic performance to be weak, which would affect equities worldwide.
"Investors have priced in the real fundamentals of companies in the US market, and the good sentiment brought about by [the Federal Reserve's] QE3 will depart if it cannot help the economy recover," Mr Sukit said.
He said that if the SET Index dropped below 1,290 points, strong technical resistance that would make the market dip to the next support at around 1,270.
Meanwhile, financial results from some of the world's biggest companies remain disappointing.
Ericsson, the world's largest maker of mobile-phone networks, posted a 43% decline in third-quarter profit. Amazon, the biggest online retailer, had its first quarterly net loss since 2003.
Oil prices fell 0.7% to $85.43 a barrel for benchmark West Texas Intermediate crude in New York, further reflecting economic weakness.
World markets fell ahead of the release of the US GDP data. Britain's FTSE 100 fell 0.5% to 5,774.36 in early trade on Friday. Germany's DAX lost 0.5% to 7,163.75. France's CAC-40 shed 0.7% to 3,388.73.
Wall Street was also headed for a fall. Dow Jones industrial futures fell 0.8% to 12,955 and S&P 500 futures lost 0.7% to 1,397.50.
Asian stocks posted losses earlier in the day after data on US housing dimmed hopes of improvement in an industry that is crucial to the country's recovery.
Japan's Nikkei 225 index slid 1.4% to close at 8,933.06. South Korea's Kospi tumbled 1.7% to 1,891.43. Hong Kong's Hang Seng shed 1.2% to 21,545.57. Australia's S&P/ASX 200 lost 0.8% to 4,472.40. The Shanghai Composite Index sank 1.7% to 2,066.21 and the Shenzhen Composite Index shed 2% to 840.51.
The Bank of Thailand has cut its growth forecast for next year as a weakening global economy depresses exports and hampers a recovery from last year's floods.
The central bank lowered its estimate for GDP growth for 2013 to 4.6% from 5%, while maintaining its prediction for this year at 5.7%.