Thai stocks, baht slump as new virus cluster threatens economic growth

Thailand's stocks and baht led losses in Asian emerging markets on Monday after coronavirus curbs in a key export hub near Bangkok were extended following a record number of cases in the country, reviving fears of an economic slowdown.

A seafood industry centre that is home to thousands of migrant workers, Samut Sakhon will stay locked down until Jan. 3 after an outbreak at a shrimp market over the weekend, leading Thailand to report more than 500 cases of coronavirus.

Thai equities slid 3.7% and the baht fell almost 1% due to the economy's heavy dependence on trade and tourism, and both were headed for their worst sessions in many months.

"The selloff is because of the news of the lockdown in the province near Bangkok," said Peerapan Suwannarat, senior market and economic research specialist at Kasikornbank.

Phillip Securities analysts in a note to clients said the lockdown could take a toll on Samut Sakorn's processed seafood, cold storage, packaging and fishing industries, major sources of revenue for the region, and dampen confidence of both local and foreign investors.

The surge in cases comes as Thailand attempts to revive a tourist industry devastated by the pandemic. Only last week, it had eased restrictions to allow more foreign tourists to return.

Other Asian currencies also buckled as investors sought the safety of the dollar on news that a new coronavirus strain had led to a tougher lockdown in the United Kingdom.

The South Korean won and the Singapore dollar fell about 0.3% each, while the Taiwanese dollar was the only exception, moving up 1.3%.

Most Asian equity markets slipped, including Manila and Kuala Lumpur, although the Shanghai index added 0.6%.

China, the region's economic powerhouse, reiterated that it would avoid any sudden shifts in policy in a bid to keep economic growth within a reasonable range in 2021, the Xinhua news agency said on Friday after a meeting of top leaders ended.