INSTANT VIEW: Thai court says ruling parties must disband

BANGKOK (Reuters) - Thai judges ordered that Prime Minister Somchai Wongsawat's People Power Party and two other parties in the ruling coalition should be disbanded on Tuesday after they were found guilty of electoral fraud.

The Constitutional Court also barred the parties' leaders, including Somchai, from politics for five years. He and many of his ministers will have to step down.

The stock market, which had been lower earlier, turned round as some investors took the view that this was a step toward resolving Thailand's damaging political crisis. The thai baht edged higher for the same reason. Analysts were skeptical.

The main index was up 0.09 percent at the midsession break.

The baht traded around 35.65/70 per dollar after the verdict after hitting 35.80 earlier, its lowest level since February 2007.

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HARRY BUNYARAKSH, COUNTRY HEAD, CLSA SECURITIES

"It is definitely something but any rise will be short-lived. It's not really the end and we all know it.

"People who trade in this market are mostly locals and really the disbanding issue is not going to outweigh bigger factors like the economic slowdown."

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KONGKIAT OPASWONGKARN, CEO, ASIA PLUS SECURITIES

"We all knew already it was going to come out this way. It's what people have expected. They disbanded the party ... but let me ask you this: does this guarantee anything? The future of Thailand is still very unclear and gloomy.

"Can anyone guarantee that both airports will reopen? We're going downhill. The whole country."

"You seize the airports and keep the country hostage? What kind of a protest is this?"

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NUCHJARIN PANARODE, ECONOMIST, CAPITAL NOMURA SECURITIES