Thai currency sinks after coup; Europe stocks flat

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Pedestrians are reflected on the electronic stock indicator of a securities firm in Tokyo Thursday, May 22, 2014. Japan's Nikkei led gains in Asian stock markets Thursday after a manufacturing survey suggested the slowdown in China's economy is flattening out and Fed minutes reinforced expectations the U.S. central bank won't rush to raise interest rates. Japan's Nikkei 225 rose 295.62 points, or 2.1 percent to 14,337.79. (AP Photo/Shizuo Kambayashi)

SEOUL, South Korea (AP) — Thailand's currency sank Thursday after the country's military seized power in a coup it said was necessary after six months of political unrest. Stock markets in Asia were boosted by signs of improvement in China's manufacturing while European shares were muted.

The Thai army chief's announcement of the coup came after the local stock market had ended its trading session. The dollar gained 0.4 percent to 32.61 baht, a sizeable move for the Thai currency which is closely managed by the central bank. The Thai stock exchange said trading would open as usual on Friday.

Bombings, lawlessness and impunity have bruised Thailand's capital Bangkok during six months of protests aiming at toppling the elected government. The political uncertainty has also taken a toll on the economy, which shrank 2.1 percent in the first quarter from the fourth quarter. The army is vowing political and economic reforms but also risks worsening the crisis if its seizure of power inflames the opposing political camps.

In other Asian markets, Japan led gains after a manufacturing survey suggested the slowdown in China's economy is flattening out and Fed minutes reinforced expectations the U.S. central bank won't rush to raise interest rates.

HSBC's China manufacturing index based on a survey of factory purchasing managers rose to 49.7 in May from 48.1 in April. Numbers above 50 on the 100-point scale indicate expansion. May's reading was the best result in five months, showing that China's economy is stabilizing after mini-stimulus measures.

While the report infused optimism, Vishnu Varathan at Mizuho Bank in Singapore said it does not mean that the world's No. 2 economy is accelerating.

The HSBC index "pick-up is at best a consolation about downside risks being mitigated rather than exuberance about an impending acceleration in activity," he said.

Wall Street was set for a slightly higher start, with Dow Jones futures and S&P futures both up 0.1 percent.

European stocks were muted after a business survey indicated that economic growth in region remains lackluster. Britain's FTSE 100 was little changed at 6,819.37 and France's CAC 40 dropped 0.3 percent to 4,456.22. Germany's DAX was nearly unchanged at 9,697.19.

The eurozone purchasing managers' index, a gauge of business activity, edged down fractionally in May to 53.9 points from 54 the previous month. The figure, which covers both services and manufacturing, suggests economic growth continues across the currency union, but at a slow pace.

On a country level, the data confirmed some weakness in France, whose economy is lagging behind its larger neighbor Germany.

In Asia, Japan's Nikkei 225 rose 2.1 percent to 14,337.79 as Japanese yen weakened moderately against the U.S. dollar.

South Korea's Kospi added 0.4 percent to 2,015.59 and Hong Kong's Hang Seng advanced 0.5 percent to 22,953.76.

Australia's S&P/ASX 200 gained 1 percent to 5,479.90. Stocks in New Zealand, Taiwan and Southeast Asian countries also advanced.

But China's Shanghai Composite surrendered gains to fall 0.2 percent to finish at 2,021.29.

In energy markets, benchmark U.S. crude for July delivery edged down 9 cents to $103.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract vaulted $1.74 to close at $104.07 on Wednesday.

In currencies, the euro fell to $1.3672 from $1.3685 late Wednesday. The dollar rose to 101.60 yen from 101.43 yen.