Thai stocks sink to 6-month low as anti-govt protests grow

Pro-democracy demonstrators hold posters of protest leaders who have been arrested during an anti-government protest, in Bangkok, Thailand October 18, 2020. REUTERS/Athit Perawongmetha

SINGAPORE: Thai shares languished at a six-month low on Monday as escalating anti-government protests threatened to further erode investor confidence in the country and heaped further pressure on the region's worst performing stock market this year.

Protests demanding the resignation of Prime Minister Prayuth Chan-ocha and curbs on powers of the monarchy have compounded Thailand's woes in recent months after the coronavirus pandemic ravaged its tourism-reliant economy.

Bangkok stocks, which have lost more than 23% so far this year, slid as much as 1.7% to their lowest since April 16 and were set for their worst day since June.

"As no signs of an end to domestic political protests are yet in sight, Thai stocks look to continue their downward bias," analysts at Phillip Securities Thailand said in a note.

They warned that protracted political protests could further exacerbate the country's tourism sector and that the foreign sell-off in Thai stocks may be higher than usual due to the political worries.

Thailand has already suffered a record $8.8 billion in equity outflows over the first nine months of this year, exchange data shows.

Most other emerging Asian stock markets rose as investors pinned their hopes on the prospect of a fresh U.S. fiscal stimulus deal and took comfort that China's economic recovery accelerated in the third quarter.

Uncertainty over whether U.S. lawmakers can agree on a fiscal package before the Nov. 3 election has weighed on sentiment recently.

House Speaker Nancy Pelosi said on Sunday she was optimistic legislation could be pushed through before Election Day.

Philippine stocks jumped 0.9% after the lower parliamentary house on Friday approved the 2021 budget, which the government hopes will underpin an economy recovering from a pandemic-led downturn.

Jennifer Lomboy, a fixed income fund manager at First Metro Asset Management, said Congress' timely passage of the budget gives the Senate a two week head start to study the bill before sessions resume in November and reduces the chance of a re-enacted budget.

"We also think that PSEi might inch up higher today as the economy further opens on the decision of the government to ease mobility restrictions," she said.

Stocks in Malaysia, also dampened by political uncertainty in recent weeks, rose 0.7% after three straight days of losses.

Most regional currencies inched higher in narrow ranges with the market awaiting signs of progress on a U.S. stimulus deal before making firmer bets.

Taiwan's dollar, the region's best performing currency so far this year as the pandemic drives demand for tech gadgets from the export-reliant economy, continued to be an outlier as it firmed nearly 1%. - Reuters

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