By Ploy Ten Kate
BANGKOK (Reuters) - Thai protesters remained in their Bangkok camp on Thursday, waiting for the prime minister to give them a date for dissolving parliament, but tension has dropped with an agreement in sight to end two months of violent protests.
The stock market surged 4.4 percent on Tuesday in response to Prime Minister Abhisit Vejjajiva's offer of a November 14 election and other proposals to break the impasse. The "red shirt" protesters responded positively but demanded clarity on house dissolution.
On Wednesday, markets were shut for the Coronation Day holiday and there was no movement on the political front, neither side wanting to be seen as disrespectful to Thailand's revered king.
Sukit Udomsirikul, a senior analyst at Siam City Securities, expected stocks to slip back on Thursday, especially with world markets under pressure from the euro zone's debt problems.
"Yes, protesters have agreed to enter into a reconciliation process but crucially, they're still not leaving the protest site and demand a date for dissolving parliament," Sukit said.
"On the whole, tensions are cooling and the chance of another major blow-up should recede now that both sides are talking about reconciliation."
Several thousand "red shirts" remained in their camp in a Bangkok locality of upmarket shopping malls and luxury hotels, many of which have been shut for weeks, at huge cost to the local economy.
However, at least one mall was making tentative plans to reopen, arranging for a clean-up.
A state of emergency has been in force since April 7 and thousands of troops and riot police surround the encampment, out of sight most of the time or lounging around in small groups.
TIMING
Sirichok Sopha, a member of parliament for Abhisit's Democrat Party, saw the dissolution date as a non-issue and said the government needed to study the best timing, giving itself scope to pass the budget for the fiscal year from October, for example.
"Regarding the election law, which states that the house dissolution should happen 45 days to 60 days before the election date, we can calculate that dissolution should be from September 15 to 30, which the UDD (red shirts) should be able to calculate themselves," he said.
The red shirts mostly back former Prime Minister Thaksin Shinawatra, who was ousted in a military coup in 2006, but more broadly they have developed into a movement of the rural and urban poor opposed to the power wielded by the aristocracy, army, business elite and Bangkok middle class.
They say Abhisit came to power illegitimately in December 2008 when a pro-Thaksin administration fell after a court case and a new coalition was formed with the prodding of the military.
The timing of elections is the most contentious issue in the plan floated by Abhisit on Monday to end a crisis in which 27 people were killed last month and nearly 1,000 wounded.
Analysts say both sides want to be in power in September for a reshuffle of the powerful military and police forces, and for the passing of the national budget.
(Writing by Alan Raybould;Editing by Sanjeev Miglani)
