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Thai stocks sink as martial law declared

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Photo - Two motorcyclists ride past cosmetic advertisement signs in downtown Chiang Mai, northern Thailand, Monday, May 19, 2014. Thailand's economy contracted by 2.1 percent in the first quarter, slammed by a protracted political crisis that is likely to slow growth for the rest of the year. (AP PhotoApichart Weerawong)
Two motorcyclists ride past cosmetic advertisement signs in downtown Chiang Mai, northern Thailand, Monday, May 19, 2014. Thailand's economy contracted by 2.1 percent in the first quarter, slammed by a protracted political crisis that is likely to slow growth for the rest of the year. (AP PhotoApichart Weerawong)
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HONG KONG (AP) — Thailand's stock market fell and the currency wobbled Tuesday after the military declared martial law in what it called an attempt to stabilize the country's precarious political situation. Stocks elsewhere around the globe were mixed as markets drifted in the absence of major economic news.

The benchmark SET index in Bangkok was down 1.2 percent at 1,393.99. The dollar spiked to about 32.65 baht before easing to about 32.54 baht.

Bangkok remained calm after Thailand's military took control of public security nationwide, surrounding police headquarters in the capital as they broadcast the announcement before dawn from multiple television stations. It requested TV channels run by opposing political camps to suspend broadcasts.

The move, which the military insists is not a coup, follows months of anti-government demonstrations and a refusal by the caretaker prime minister to step down.

"We're likely going to be looking at more unrest on the ground and if that's the case sentiment is going to worsen a lot more and the Thai market may see further downside," said Desmond Chua, market analyst at CMC Markets in Singapore.

The latest round of unrest began in November and has been a drag on the Thai economy, which shrank 2.1 percent in the first quarter from the fourth quarter, according to data released Monday.

"The last thing the economy needs is further political instability," said Michael Every, head of Asia Pacific financial market research at Rabobank. He said that "martial law will almost certainly hit near-term tourism arrivals."

Stock markets elsewhere were muted.

In early European trading, Britain's FTSE 100 dipped 0.4 percent to 6,814.26 and France's CAC 30 slipped 0.4 percent to 4,449.75. Germany's DAX was down 0.3 percent at 9,632.99,

U.S. stocks were poised to open lower. Dow futures were down 0.1 percent to 16,474 and S&P 500 futures shed 0.1 percent to 1,880.70.

Asia markets ended mostly higher, with Tokyo's Nikkei 225 up 0.5 percent to close at 14,075.25. Hong Kong's Hang Seng rose 0.6 percent to 22,834.68 but South Korea's Kospi slipped 0.2 percent to 2,011.26.

China's Shanghai Composite Index edged up 0.2 percent to 2,008.12 and Australia's S&P/ASX 200 inched up 0.2 percent to 5,420.40.

The euro fell to $1.3685 from $1.3709 in late trading Monday. The dollar fell to 101.31 yen from 101.49.

Benchmark crude oil for June delivery was up 14 cents to $102.25 in electronic trading on the New York Mercantile Exchange. The contract rose 53 cents to settle at $102.11 on Monday.

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