BANGKOK Thousands of Thai protesters surrounded the office of Prime Minister Abhisit Vejjajiva on Saturday, raising fears of a confrontation after repeated threats to expel troops guarding Bangkok's old city.
Red-shirted demonstrators seeking new elections pulled down barricades and threatened to force their way into the heavily guarded Government House compound. Neither Abhisit nor his government were present.
After negotiations with security chiefs, the protesters returned to their encampment, fearing Abhisit would declare a state of emergency that would allow security forces to break up their mass rally.
"We don't want them to use this as a reason to impose an emergency decree," Nattawut Saikua, a protest leader, said. He had earlier said the demonstrators had reached "breaking point."
The "red shirts" back twice-elected former premier Thaksin Shinawatra and have taken aim at the military and so-called bureaucratic elites they say are meddling in politics and conspired to overthrow Thaksin in 2006.
Their fiery rhetoric represents a more confrontational approach and a level of brinkmanship not seen in the two weeks of peaceful rallies, which analysts say have won the protesters support but brought them no closer to toppling the government.
The lack of violence combined with Abhisit's steadfast military backing has encouraged foreign investors lured by cheap shares with high dividend yields to pour into Thailand's stock market in recent weeks.
On Friday, foreigners bought Thai stocks for a 24th straight session, spending a net 1.01 billion baht ($31.2 million). They have purchased about 47 billion baht ($1.5 billion) since February 22 as hot money continues to flow into regional bourses.
Thai Finance Minister Korn Chatikavanij said on Friday capital inflows into the Thai bourse should continue for the foreseeable future, although any escalation in political tension could trigger outflows.
Anupon Sriard, an analyst at BFIT Securities said on Saturday the increased tensions were not likely to affect Thailand's financial markets when then reopen next week.
"As long as it is peaceful enough, everything should already be priced in, unless of course, we see some violence," he said.
BANGKOK ON EDGE
Analysts say protest leaders are facing a dilemma: either maintain their non-violent approach and fail to rattle the government, or up the ante and risk sparking clashes that could cost them their gains in support and credibility.
The threat of unrest has left the city of 15 million people on edge, compounded by a slew of mysterious blasts and grenade attacks causing only minor damage. The latest came on Saturday evening when a bomb exploded near the army-run Channel 5 television, injuring two soldiers and two civilians.
(Additional reporting by Ploy Ten Kate; Writing by Martin Petty; Editing by Michael Roddy)