SE Asia Stocks -Thai shares fall after martial law, Jakarta drops on political concerns
May 20 (Reuters) - Thai shares fell on Tuesday after the army declared martial law to restore order following six months of anti-government protests, while Indonesian stocks declined on uncertainty over the outcome of the presidential election in July. Thailand's SET index fell more than 1.6 percent to 1,387.62 in early trade but recouped its losses and was down 0.8 percent by midday amid a mixed reaction to martial law, which the army said was not a coup. The decline was led by shares of Advanced Info Service and Airports of Thailand, which fell 2.1 percent and 2.8 percent respectively. The Thai baht, which earlier fell as much as 0.5 percent per dollar, recovered most of its initial losses, with the central bank suspected of intervening to support the currency. Tuesday's declaration of martial law came after six months of anti-government protests left Thailand without a proper functioning government, raising concerns about economic policies and stability essential for investor confidence. Initial panic among investors led them to start selling stocks soon after the declaration. "The latest action by the Thai military to announce martial law, though seeming negative at first glance, will help limit the risk of political violence," Bangkok-based KGI Securities strategists said in a report. "However, the degree of upswing should be moderate as SET Index has risen in the past two sessions, and it is possible that the reaction of foreign investors to the martial law will be negative," they said, recommending that traders should hold their positions or pick up shares if the index eases. Maybank Kim Eng Securities said the tourism and hospital sectors will be affected by the martial law. "Embassies may increase the degree of travel warnings to Thailand. We recommend to buy on dips." Indonesian stocks were under pressure due to growing uncertainty over the outcome of the July 9 presidential election. The Jakarta index fell 2.2 percent and hit its lowest level since May 9, led by a 5.4 percent loss in state-owned lender PT Bank Mandiri. Shares were near a one-year high on Monday but lost all the gains after Indonesia's second-largest party, Golkar, unexpectedly said it would back Prabowo's Gerindra, the main rival of front runner Joko "Jokowi" Widodo. The rupiah also fell in both, the local and the non-deliverable forwards markets after the presidential election turned into a tight race. Other Southeast Asian markets remained range-bound with Philippine and Vietnamese shares up 0.4 percent and 0.3 percent respectively, while Singapore was up 0.1 percent. Malaysian shares were 0.1 percent weaker, falling from a record closing high in the previous session. For Asian Companies click; For South East Asia Hot Stock reports, click; SOUTHEAST ASIAN STOCK MARKETS Change at 0553 GMT Market Current Prev Close Pct Move TR SE Asia Index* 422.89 425.94 -0.72 Singapore 3264.63 3262.43 +0.07 Kuala Lumpur 1884.38 1887.07 -0.14 Bangkok 1398.75 1410.63 -0.84 Jakarta 4904.16 5015.00 -2.21 Manila 6901.45 6870.90 +0.44 Ho Chi Minh 534.77 533.04 +0.32 * The Thomson Reuters South East Asia Index is a highly representative indicator of stocks listed in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. (Reporting by Shihar Aneez in COLOMBO and Viparat Jantraprap in BANGKOK; Editing by Anupama Dwivedi)
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