Thailand's stock market tumbled Thursday as the lengthy hospitalization of 81-year-old King Bhumibol Adulyadej raised fears of a power vacuum in this divided Asian nation, AP reported. The benchmark stock index closed down 5.3 percent at 692.72 after earlier diving more than 8 percent on heavy selling by foreign investors. Thailand, the second-largest economy in Southeast Asia, is a key regional ally for the United States and a major production and export base for automakers such as Toyota Motor Corp. and General Motors Co. It was the second straight day the market had fallen. A statement from the royal place that the king, hospitalized since Sept. 19, was recovering from a «lung inflammation» failed to reassure investors. Brokers said selling accelerated after «stop loss» levels were triggered _ requiring some investors to sell their stock holdings to limit losses. Bhumibol is a constitutional monarch with no formal political role, but he has repeatedly brought calm in times of turbulence and is widely revered as the country's moral authority and a unifying figure. «The market's skittishness is traceable to the possibility of a destabilizing power vacuum if the monarchy's power diminishes,» political risk experts Eurasia Group said in a report. Thailand has been divided between opposing «red shirt» and «yellow shirt» political camps following the 2006 coup that ousted Thaksin Shinawatra as prime minister. Officials urged investors not to react to rumors that they left undefined _ a common practice in Thailand when speculation concerns the revered monarch. «It is normal that the market goes up and down. The market has gone up over 60 percent since the beginning of the year,» said Finance Minister Korn Chatikavanij.
