Thai anti-government protesters marched in Bangkok on Monday, carrying empty coffins in memory of comrades killed at the weekend, as the country's worst political violence in 18 years sent the stock market down 5 percent. Saturday's fighting, some of it in well-known Bangkok tourist areas, ended after security forces pulled back late in the night.
The capital has been calm since then, while authorities ponder whether to renew a potentially bloody crackdown on the month-long protests or make some concession to demands for immediate polls. The clashes, in which 21 protesters and security personnel died and more than 800 were injured, prompted concern from ratings agency about Thailand's credit risk.
The "red shirt" protesters, mostly rural and working-class supporters of ex-premier Thaksin Shinawatra who was ousted in a coup in 2006, want Prime Minister Abhisit Vejjajiva to dissolve parliament and leave the country. Thousands of them circled the city on trucks, scooters and "tuk-tuk" taxis, in a defiant mood after the army failed to eject them from one of two Bangkok bases where they have camped out - one in an upscale area, where big malls have had to shut.
"We will continue to rally until Abhisit is no longer prime minister," Jatuporn Prompan, a red shirt leader, told reporters. The Bangkok Post daily, citing unnamed sources, said Abhisit could dissolve parliament in six months, three months sooner than his most recent proposal. He has to call an election by end-2011.
The red shirts see Abhisit as a front for the establishment elite and military who came to power not through the ballot box but through a parliamentary stitch-up in December 2008 when the courts dissolved a pro-Thaksin ruling party. The military brass is averse to allowing Thaksin's supporters back into power, but many in the ranks who come from the same social strata as the red shirts sympathise with them.
Revered King Bhumibol Adulyadej, who has intervened in past crises, has been silent so far. The 82-year-old head of state has been in hospital since September. Political analysts said the impasse could continue even if new elections were held. Bond yields fell as investors bet a central bank interest rate rise would be delayed if political events derailed the economic recovery.
Risk aversion sent Thailand's five-year credit default swaps (CDS), which insure against debt default, 5 basis points higher to 105/111 basis points, the most since March 3. The stock market dropped 5 percent, and has now shed the bulk of its gains since the start of the year.
Prapas Tonpibulsak, chief investment officer of Ayudhya Fund Management, expected stocks to fall up to 10 percent in the near term in reaction to the events. Shares in national carrier Thai Airways fell nearly 12 percent and Airports of Thailand, the main airport operator, was down more than 5 percent at midsession.
Tourism - which accounts for 6 percent of the economy and directly employs 1.8 million people - is already suffering, especially after the scenes of heavy fighting in Khao San Road, a magnet for low-budget travellers in the old town. More than 100 charter flights had been booked to bring in Chinese tourists for Songkran, the Thai New Year holiday which runs from April 13 to 15. Around 70 had been cancelled before the weekend and all have now been scrapped. The central bank said the turmoil could hit Thailand's credit ratings if it went on.