Thai coup hurts Asian markets in early trading
Jitters over the military coup in Thailand hurt Asian stock markets in early trading on Wednesday.india Updated: Sep 20, 2006 09:42 IST
Jitters over the military coup in Thailand hurt Asian stock markets in early trading on Wednesday, but the impact may be limited because the takeover could help end the long-lasting Thai political crisis, analysts said.
"There's obviously going to be some nervousness in the region today, but that's not going to last long," said Shane Oliver, Sydney-based Head of Investment Strategy and Chief Economist AMP Capital Investors. "The impact is mainly on perception of Thailand and this will be rubbing off on the rest of the region's markets." Thailand's military overthrew Prime Minister Thaksin Shinawatra in a coup staged on Tuesday night without firing a shot. The move came amid mounting criticism that the popularly elected leader had undermined democracy.
The military said it would soon return power to a democratic government but didn't say when. The coup leaders put the country under martial law on Wednesday, ordering the stock exchange, schools, banks and government offices to remain closed and declaring a provisional authority loyal to Thailand's king.
Japan's stock market, the largest in the region, fell sharply in the morning session. At 0710 IST, the Nikkei 225 Stock Average was down 1.3 percent at 15672.86.
The drop was only partly in reaction to the Thai coup, traders said. Weakness on Wall Street overnight and concerns over the US economy appear to have had a bigger affect on the market, they said. The decliners in Japan included companies with relatively large operations in Thailand.
AMP Capital's Oliver said that the impact on the Thai stock market, once it reopens, may also be limited to just a few days, as long as the military moves to return power to a democratic government.