THAI BOURSE LOSES 4.3% ON OVERSEAS RUMOURS OVER POLITICAL SITUATION

       Stocks plunged yesterday by 4.32 per cent at one point on rumours from Hong Kong and other overseas financial markets on the sensitive political situation here in Thailand.
       None of the speculation could be substantiated, but foreign investors dumped shares worth a net Bt3.9 billion.
       The selling spree started late in the first trading session and turned into a rout in the afternoon, crashing the SET Index to the day's trough of 714.39 points before it recovered to end the day at 731.47, down 2.04 per cent - the biggest single-day decline since August 17.
       Turnover was Bt47.57 billion, the highest level in two years and 10 months.
       Blue chips were at the centre of the free fall. PTT lost 2.2 per cent at Bt267, Kasikornbank was off 2.81 per cent at Bt86.50, Siam Commercial Bank dropped 3.06 per cent to Bt87, Banpu slumped 2.19 per cent to Bt446, Bangkok Bank fell 2.29 per cent to Bt128, Bank of Ayudhya dipped 2.88 per cent to Bt20.20 and TMB Bank sank 3.05 per cent to Bt1.27.
       Patareeya Benjapholchai, president of the Stock Exchange of Thailand, rushed to allay the jitters by saying the correction could be ascribed the stock market's surge of 65 per cent so far this year.
       There was no other reason affecting the local stock market, she said.
       Foreign investors have loaded up a net Bt5.3 billion in shares in the past nine months.
       Capital should keep flowing into the stock market, as the bourse's price-to-earnings ratio is still below some of the other markets in the region, she said.
       And the Thai market for the first nine months this year offered the best dividend yield in the region at 3.56 per cent, followed by the Philippines at 3.55 per cent, Singapore at 3.5 per cent and Malaysia at 3.43 per cent.
       The US and Europe are the major sources of the flow of funds, she added.
       An analyst at a local brokerage siad the SET Index had swung wildly, bucking the regional trend, due to the rumours.
       Besides Japan, Thailand was the only place in Asia with a stock market in negative territory yesterday.
       The analyst believes the sell-off came from foreign investors, but equities recovered slightly in the 30 minutes before closing when those who sold shares bought them back.
       The stock market would rebound sharply if any authority clarified the rumours were untrue, but would be under pressure if no party gave a clear explanation, the analyst said.
       The SET's next support is at 715-720, with resistance at 740-745.