Thai stocks jump on bets political turmoil may spur rate cuts
Ms Paetongtarn was suspended from duty pending a ruling on a case seeking her dismissal for breaching ethical standards during a recent telephone conversation with former Cambodian prime minister Hun Sen.
Deputy Prime Minister Suriya Jungrungreangkit will serve as acting prime minister, though Ms Paetongtarn can still attend cabinet meetings in her other role as culture minister, following a cabinet reshuffle this week.
The court's decision adds to mounting pressure on a government fighting for survival, given the daunting economic challenges it is facing.
The Stock Exchange of Thailand jumped 1.8% in the afternoon session, led by shares of Delta Electronics Thailand Plc, which soared more than 7%.
The SET Index ended the day at 1,110.01 points, an increase of 20.45 points in turnover worth 41.7 billion baht.
Analysts attributed the sharp jump in stocks to expectations that political uncertainty could pave the way for further rate cuts by the Bank of Thailand.
'(The court's decision) could exacerbate external uncertainties as tariff negotiations with the US are still in progress but it could also clear the way for a more sustainable solution,' said Lavanya Venkateswaran, senior Asean economist at OCBC.
She predicted a cumulative 75 basis points in interest rate cuts in the second half, compared with a baseline assumption of 25 bps.
The baht dipped briefly to 32.61 to the dollar after the court's decision, but recovered somewhat to trade around 32.46.
'Thai assets have weathered the PM's suspension quite well, which perhaps reflects the view that change of any sort at the top could well turn out to be a positive development,' said Tim Waterer, chief market analyst at KCM Trade.
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