Bangkok: Thai stocks surged the most in 15 months and the baht rose to near a two-year high after protesters scrapped a planned march through Bangkok's business district, reducing the risk of further clashes with authorities.
The SET Index, the world's best performer, jumped 39.47, or 5.4 per cent, to close at 765.76, the steepest advance since January 5, 2009. The measure had slid 8 per cent in the previous three trading days, the most for the period in 17 months, after clashes killed two dozen people this month. The baht gained 0.4 per cent to 32.15 against the US dollar, near its highest level since May 2008.
Thai protesters cancelled the march because they failed to attract large crowds a day after the army cordoned off a business district next to their central Bangkok demonstration site. The pullback may bolster Prime Minister Abhisit Vejjajiva's efforts to end the six-week campaign by opponents who are demanding an immediate election.
"The calmer political situation allows investors to focus more on companies' earnings and valuations," said Win Udomrachtavanich, chief investment officer at Asset Plus Fund Management Co., which manages about 24 billion baht (Dh2.74 billion, $745 million) of assets. "This should be only a short-lived relief because the risk for new confrontation remains."
Demonstrators, who support exiled former premier Thaksin Shinawatra, have defied emergency rule since April 7 and previously ignored government warnings to avoid parts of the capital.
Soldiers clashed with protesters on April 10 in a failed attempt to disperse them, leaving 25 dead and more than 800 injured, the deadliest confrontation in almost two decades.
Foreign investors are returning to Thailand after the biggest selloff in almost five months. Overseas investors bought 1.4 billion baht of stocks yesterday.
