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 The benchmark index dropped 2.7 percent to a four-month low of
1,263.72 before the midday break and the baht lost for a 10th
straight day against the dollar. Investors are worried a February 2
poll will not go ahead, leaving Yingluck's government exposed to
prolonged attacks by opponents.
National Security Council chief Paradorn Pattanatabut said on
Thursday security agencies were considering declaring a state of
emergency after protesters said they would try to "shut down" the
capital from January 13.
"The situation has intensified," Paradorn told Reuters. "We may need
to call for tougher measures and security agencies have planned for
that."
The latest bout of political tumult erupted in November after a
blunder by the ruling Puea Thai Party, which tried to push through
an unpopular amnesty bill that would have annulled the jail sentence
of Yingluck's self-exiled brother and former premier, Thaksin
Shinawatra, the divisive tycoon at the heart of eight years of
on-off conflict.
Protesters say Yingluck is a puppet of Dubai-based Thaksin, who they
call a corrupt crony capitalist who has subverted a democratic
system that needs to be suspended and overhauled.
Backed by Bangkok's conservative elite, their broader aim is to
neutralize the power of Thaksin's political juggernaut, rooted among
the rural poor in the populous north and northeast, which has won
every poll since 2001.
Yingluck dissolved parliament on December 9 to defuse massive street
protests. However, calling a new election she is almost certain to
win has had the opposite effect, sparking deadly clashes, mysterious
shootings and concerns about military intervention or legal
paralysis.
SHARES DUMPED
The crisis has hurt Southeast Asia's second-biggest economy, which
is already suffering from weak spending and sluggish export growth.
The baht slid to 32.91 per dollar on Thursday, its weakest since
February 2010. The share selloff came after foreign investors
offloaded $1.26 billion of Thai shares in December, compared with
$6.2 billion for the whole year.
Thailand's Election Commission (EC) met on Thursday to try to find a
solution to break the poll deadlock but, with Thais deeply
polarized, that appears increasingly unlikely.
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The conflict is all too familiar in Thailand after eight years of
upheaval characterized by violent street protests and blockades, as
well as judicial and military intervention.
Yingluck has spent much of the past two weeks in her northern
strongholds but returned to Bangkok on Wednesday to join military
leaders in paying a New Year goodwill visit to King Bhumibol
Adulyadej's top aide, Prem Tinsulanonda, a retired general in his
90s.
Yingluck is clinging on, asserting her democratic mandate from an
election landslide in 2011, but protesters backed by Bangkok's
royalist establishment, the opposition Democrat Party and old-money
families are demanding she resigns to allow an appointed "people's
council" to take over.
Thailand has been in a tense stalemate for weeks and the government
is looking increasingly isolated.
The mostly peaceful protests descended into chaos on December 26
when a hard core of demonstrators tried to invade an election
registration centre. Police responded with tear gas and rubber
bullets, while unknown gunmen killed a policeman and a demonstrator.
Scores were wounded.
The EC urged Yingluck to postpone the election after those clashes
but was quickly rebuffed by the government, which said any delay
would be unconstitutional.
The next day, the country's powerful army chief refused to rule out
intervening to defuse the crisis, a marked shift from the usual
denials by a coup-prone military.
(Additional reporting by Akarapol Niyomyat;
writing by Martin Petty; editing by Richard Borsuk and Paul Tait)
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