Thailand's stocks sink with declaration of martial law
AP and AFP
May 21, 2014, 12:06 am TWN
HONG KONG--Thailand's stock market fell and the currency wobbled Tuesday after the military declared martial law in what it called an attempt to stabilize the country's precarious political situation. Stocks elsewhere around the globe were mixed as markets drifted in the absence of major economic news.
Bangkok remained calm after Thailand's military took control of public security nationwide, surrounding police headquarters in the capital as they broadcast the announcement before dawn from multiple television stations. It requested TV channels run by opposing political camps to suspend broadcasts.
The move, which the military insists is not a coup, follows months of anti-government demonstrations and a refusal by the caretaker prime minister to step down.
"We're likely going to be looking at more unrest on the ground and if that's the case sentiment is going to worsen a lot more and the Thai market may see further downside," said Desmond Chua, market analyst at CMC Markets in Singapore.
The latest round of unrest began in November and has been a drag on the Thai economy, which shrank 2.1 percent in the first quarter from the fourth quarter, according to data released Monday.
"The last thing the economy needs is further political instability," said Michael Every, head of Asia Pacific financial market research at Rabobank. He said that "martial law will almost certainly hit near-term tourism arrivals."
In European trading, Britain's FTSE 100 dipped 0.4 percent to 6,814.26 and France's CAC 30 slipped 0.4 percent to 4,449.75. Germany's DAX was down 0.3 percent at 9,632.99,
U.S. stocks were lifted by a rally in tech shares, which have suffered heavy selling in recent weeks on concerns big-ticket firms such as Twitter and Netflix were overvalued.
The upbeat atmosphere came after Apple and Google said late Friday they were dismissing lawsuits against each other and would work together on patent reform. The good news spread throughout Wall Street.
The Nasdaq rose 0.86 percent, the Dow added 0.12 percent and the S&P 500 gained 0.38 percent Monday.
Asian markets mostly rose Tuesday following gains on Wall Street. Tokyo rose 0.49 percent, or 68.81 points, to 14,075.25 after four straight days of losses, Sydney gained 0.21 percent, or 11.4 points, to 5,420.4 and Hong Kong added 0.57 percent, or 130.18 points, to 22,834.68.
Shanghai was 0.15 percent higher, adding 2.94 points to 2,008.12. Seoul ended 0.19 percent lower, losing 3.88 points to 2,011.26.
Attention now turns to the release of Japanese trade data on Wednesday as well as the Bank of Japan's latest policy meeting.
That will be followed by the release of minutes from the U.S. Federal Reserve's most recent policy meeting, which will give a better insight into the thinking of board members.
Gold fetched US$1,292.90 an ounce at 1045 GMT compared with US$1,299.89 late Monday.