Thai shares plunged 1.52 per cent across the board yesterday on the news that British police had foiled an alleged plot to blow up aircraft in mid-flight between the United Kingdom and the United States.

Hong Kong's Hang Seng Index closed down 0.72 per cent, while South Korea's KOSPI Index ended down 0.8 per cent and Singapore's Straits Times Index fell 0.2 per cent.

The local stock market took the hardest blow in the region. There was little movement in the morning trading session, but the market slumped significantly after the news of the terror plot was released.

The composite SET Index closed for the day at 698.12, two points off the day's lowest level of 696.80. Turnover was moderate at Bt14.9 billion.

Banking and energy stocks were hardest hit with 2.34-per-cent and 2.25-per-cent falls, respectively.

Bangkok Bank shares fell 1.9 per cent to Bt105, Krung Thai Bank fell 1.8 per cent to Bt11.10, while shares in Siam Commercial Bank dropped 1.7 per cent to Bt57.

PTT Exploration and Production stock fell 4.07 per cent to Bt118, PTT by 1.61 per cent to Bt244, Rayong Refinery by 1.9 per cent to Bt20.70, and Thai Oil by 2.27 per cent to Bt64.50.

Airports of Thailand fell 1.7 per cent to Bt58.50, while Thai Airways International dropped 2.5 per cent to Bt39.

At press time, European markets had also slid sharply as renewed terrorist fears hit airline stocks in a market already under pressure from an overnight sell-off in the US.

"The bomb plot renewed fears of a terrorist attack and investors sold shares across the world, including inThailand," said Asia Plus Securities strategist Phuwadol Lapudomsuk said.

In addition, profit-taking following recent strong gains dampened stock market sentiment, he said.

British police took 21 people into custody after overnight raids in connection with the alleged plot to blow up several aircraft in mid-flight between the UK and the US. The UK's threat warning level was raised from "severe" to "critical", the highest of five ratings.

"Selling was triggered by both retail and institutional investors trying to reduce their risk exposure," said Pichai Lertsupongkit, Prudent Siam Securities vice president.

Siam City Securities' senior analyst Sukit Udomsirikul said the news from London had eroded investor confidence and ignited panic selling. With the absence of fresh positive news and lingering anxiety over the terrorist plot, the Thai bourse is today likely to drop further, he said.

Sukit estimated the SET Index's support level today at 690 points, and the resistance level at 705 points.