Thailand's Senate plans to reject a proposed amnesty law for political offenses when it meets from Nov. 11, after thousands of people joined protests across the country yesterday to oppose the legislation.

The government, which has said the law would help heal social divisions, will accept the Senate's decision, Prime Minister Yingluck Shinawatra said today in a televised address.

Two members of the 150-seat upper house said more than 50 percent of senators would vote to reject the bill next week. The SET Index of Thai stocks jumped 2 percent at the close, the most in six weeks, while the baht erased an early decline.

“Many senators are in a panic because they're afraid of the public's reaction,” Senator Prasarn Marukpitak today told the Blue Sky television network, which is affiliated with the opposition Democrat party. “Some say the public trend is so strong, they can't go against it. So they can either reject the draft law or abstain.”

Eoin Treacy's view Thaksin Shinawatra is a divisive character not least because of how he accumulated his wealth and because his populist policies have so many followers. His return to Thailand would be a cause for concern because of the increased potential for social unrest but as events develop this is looking increasingly unlikely.

The SET Index retested its 1993 peak in July before experiencing its largest decline since 2008. If we take the size of the medium-term rally, proximity to historic peaks and depth of the recent pullback, it would be reasonable to expect a medium-term period of support building probably between 1300 and 1600.

The US Dollar's rally has coincided with the medium-term correction evident in the Thai stock market. It has been ranging above the 200-day MA since late September and a sustained move below THB31 would be required to question medium-term scope for additional upside.