(AP) Stocks dropped suddenly Tuesday after a state of emergency was declared in Thailand and rumors of a military coup followed.
Traders watching Thailand closely are certain to remember how trouble in the kingdom has had worldwide implications in the past: The Asia currency crisis that erupted in 1997 began with the devaluation of the Thai baht, then snowballed into an international economic crisis. Thailand was the world's fastest growing economy between 1985 and 1995 and was the country that introduced people to the benefits - and risks -- of investing in the tiger economies of Asia, according to David Riedel, president of Riedel Research Group, a New York City-based provider of independent equity research focusing on emerging markets.
The coup occurred as Thailand's Prime Minister Thaksin Shinawatra was in New York City for the annual United Nations General Assembly meeting. Plans for Thaksin to address the U.N. late Tuesday were scrapped.
"The prime minister with the approval of the cabinet declares serious emergency law in Bangkok from now on," Thaksin said on Channel 9 from New York, the Associated Press reported.
Thaksin also said he was transferring the nation's army chief to work in the prime minister's office, effectively suspending him from his military duties, according to reports. The Thai military revoked the country's constitution after it seized power.
The stock market, banks and schools in Thailand will be closed on Wednesday as a result of the takeover.
The baht fell sharply Tuesday, as did Brazil's real, which also tumbled in the '97 crisis.
Thailand, usually one of Southeast Asia's most stable countries, has been in a state of political flux this year after massive rallies forced Prime Minister Thaksin Shinawatra to dissolve Parliament. Thaksin, who was in New York attending the United Nations General Assembly, has faced calls to step down amid allegations of corruption and abuse of power.Crude oil futures plummeted after OPEC played down the likelihood of a production cut. A barrel of light crude settled at $61.66, down $2.14, in trading on the New York Mercantile Exchange.INDIA also felt the heat due to its proximity to the couped nation stocks fell sharply in last 45 mins of trade almost a panic like situation( Traders watching Thailand closely are certain to remember how trouble in the kingdom has had worldwide implications in the past) Todays trade should clear the direction of markets as the news is now known world over .....
