The Stock Exchange of Thailand (SET) composite index nosedived 64.62 points or 8.85 per cent to 665.93 in the first minutes of trading and the bluechip SET 50 index fell 53.10 points to 458.90.

At 11:00 am, the SET index rose slightly to 678.85 point, a drop by 51.70 point from the previous close. The volume was Bt74.78 million.

The Thai currency, which hit a new nineyear high of 35.12 to the dollar Monday, fell to 35.6570 early Tuesday.

The Bank of Thailand on Monday ordered banks to lock up 30 per cent of any new foreign currency deposits above 20,000 dollars for a year in an effort to curb inflows of funds pushing up the local currency.

Such deposits would carry no interest and a third of the funds would be forfeit if they were withdrawn before the one year was up.

"The new measure really dampened sentiment. It (makes) the Thai stock market less attractive for shortterm foreign investors," said Sukit Udomsirikul, a senior market analyst at Siam City Securities.

Since the beginning of the year, the Thai baht has jumped about 14 per cent against the dollar, putting pressure on the country's key exporting companies.

Analysts said the central bank's latest move was aimed at protecting Thai exports.

The strong baht makes Thai exports less competitive in overseas markets and slashes the value of companies' repatriated profits.

The Nation/Agence France Presse