SET up 10.05 to 1,405.26 points

Thai stocks gained 0.7% on Friday on heavy bargain-hunting by local funds and despite worsening local political tensions.

The Stock Exchange of Thailand Index rose 10.05 points from Thursday to close at 1,405.26, an increase of 2% from the previous Friday's close of 1,377.36. Turnover was high at 44.38 billion baht, with 5.32 billion shares traded.

The local market is now up 8.2% from the end of 2013. Stocks have advanced despite growing warnings that the economy is at risk of contracting as the country endures months without a functioning government.

The National Economic and Social Development Board on Monday is expected to report that gross domestic product shrank in the first quarter from the same period a year earlier. The median forecast of economists polled by Bloomberg is for a contraction of 2.2%.

Local institutions were big net buyers of 3.11 billion baht worth of Thai shares on Friday and brokers bought 286 million. Individual investors were net sellers of 1.3 billion baht. 

Foreign investors were net sellers on Friday of 2.08 billion baht, bringing their net sales for the month to 3.2 billion baht. For the year to date they are net sellers of 8.1 billion.

In global markets, mixed economic indicators led to subdued trade, except in India, where stocks soared on the election of the country's first majority government in 30 years.

Indian shares have been rising since voting got under way six weeks ago, as investors anticipated a victory for the business-friendly Bharatiya Janata Party and its allies.

The Sensex in Mumbai surged as much as 6.1% on Friday to touch an all-time high of 25,375.63, before paring gains. It was 1.3% higher in afternoon trading.

Other stock markets were more subdued, with most Asian benchmarks finishing flat or lower following a Wall Street sell-off after a batch of mixed reports on the global economy.

European stocks were steady in early trading, with France's CAC 40 and Germany's DAX off 0.1% while Britain's FTSE 100 was up 0.1%. Futures pointed to a slightly higher opening for Wall Street. Dow futures crept up less than 0.1% to 16,422.00 and S&P 500 futures rose less than 0.1% to 1,867.70.

Japan led the decline in Asia, with Tokyo's Nikkei 225 shedding 1.4% to 14,096.59.South Korea's Kospi rose 0.2% to 2,013.44 while Hong Kong's Hang Seng lost 0.1% to 22,712.91 and the Shanghai Composite rose 0.1% to 2,026.50. Australia's S&P/ASX 200 retreated 0.6% to 5,479.00.

In Bangkok, the SET50 index of blue chips ended at 955.52 points, up 8.64, on turnover of 29.81 billion baht, and the SET100 rose 17.77 points to 2,092.57 in trade worth 33.29 billion. The SETHD index of high-dividend shares rose 10.28 points to 1,131.64, with turnover of 14.91 billion baht. The Market for Alternative Investment lost 1.73 points to 415.59, with transaction value of 2.46 billion baht.

In the currency markets, the baht weakened on the day but was improved from a week ago. But with a loss of 2.8% over the past six months, it has been the worst performer among the 11 most active currencies tracked by Bloomberg.

The baht was trading late Friday in Bangkok at 32.48/51 to the dollar, compared with 32.42/47 on Thursday and 32.58/60 a week earlier.

The yield on 10-year government bonds fell by the most since December ahead of the release of official first-quarter GDP figures.

"Thailand bond yields are expected to remain under downward pressure," said Vivek Rajpal, a Singapore-based strategist at Nomura Holdings. "Given the low credit-growth environment in the country, investors are expected to allocate money in bonds."

The yield on the 3.625% sovereign notes due in June 2023 fell eight basis points to 3.40%.

Global investors bought a net 1.4 billion baht worth of local debt on Thursday, a second day of inflows, according to Thai Bond Market Association data.

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