Thai share prices jumped 2.42 percent on Wednesday as buyers returned to the market after the New Year holiday with a second day of sharp gains, especially in the banks, dealers said.
They said a strong regional performance after a strong rally on Wall Street overnight lent support as did a continued easing in inflation pressures in December, encouraging hopes interest rates will not rise too much further.
The Stock Exchange of Thailand (SET) composite index rallied 17.56 points to 743.20 points and the blue chip SET 50 index was up 14.49 points to 525.73.
Gainers led losers 290 to 80 and 80 stocks were unchanged on active trade of 7.1 billion shares worth 51.2 billion baht (1.26 billion dollars).
The Thai baht rose to 40.50-54 against the one dollar from Tuesday's 40.85-87 but fell to 48.93-99 against the euro from 48.46-56.
Thailand's inflation rate in December eased to 5.8 percent from 5.9 percent in November for a second consecutive monthly fall as food prices turned lower, the commerce ministry said.
It said inflation for the year was 4.5 percent in 2005, up from 2.7 percent in 2004, driven mainly by high oil prices,
"It's a quick gain for the index and the volume was very active, so it's clearly due to the January effect," Pongrat Rattavananon of Bualuang Securities said, referring to traditional seasonal gains.
She warned that the market could face mild short-term profit taking on Thursday following two sessions of sharp gains.
The banking sectoral index rose 4.04 percent, finance jumped 4.34 percent and the communication sector gained 3.41 percent.
Bangkok Bank gained 5.00 baht to 114.00, Kasikornbank added 1.00 to 74.00 and Siam Commercial Bank rose 2.00 to 56.50. Siam Cement was up 4.00 to 252.00 PTT Exploration and Production rose 8.00 to 488.00 and Thai Airways International edged up 0.75 to 43.75.
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