Uncertainty over the formation of a new government in Thailand has dragged investor confidence in the country's stock market to an eight-month low, a capital markets group said on Wednesday.

A survey by the Federation of Thai Capital Market Organisations (FETCO) showed its overall investor confidence index fell to 77.70 from 110.09 in May, slipping into the "bearish zone" for the first time in eight months.

Foreign investor confidence was also in the same zone, as they have sold a net 102.4 billion baht ($3.15 billion) of Thai shares so far this year.

In the first half of May, before the election that was swept by progressive, anti-establishment parties, the main stock index had continued to rise, bucking a global trend, the FETCO said.

But, post-election, the index was the "worst performer among global markets due to concerns over the new government formation and its economic policies," FETCO chair Kobsak Pootrakool said in a statement.

The index has fallen 8.6% so far this year, the most in Asia.

Prime ministerial frontrunner Pita Limjaroenrat of Move Forward party has formed an alliance with seven other parties but faces an uphill battle in wooing members of an unelected Senate to back him in a legislative vote on the premier, which is expected by August.

Investors are monitoring the economic policies of the election winners, including stimulus measures, wage increases and tax plans, FETCO's Kobsak said.

"The slower it is formed, the higher concern it will be," he said, referring to the next government. (Reporting by Satawasin Staporncharnchai Editing by Kanupriya Kapoor)