Panic selling by spooked investors drove the stock market down by 1.4 per cent, but most business operators welcomed the emergency rule provided the government had a clear objective and a specific timeframe for implementing it.

The only factor for the decline of 9.53 points in the Stock Exchange of Thailand composite index to 669.04 was the Council for National Security's (CNS) call for the emergency rule.

"This created a psychological impact on the market as most investors were afraid that the government could come up with a harsh measure to handle the gathering this Friday," an analyst from a local securities house said.

A source from a foreign brokerage said the emergency rule would rattle foreign investors, who have grown wary of the Bank of Thailand's unclear monetary measures.

"Foreign investor confidence in this government is terribly low. If the government enforces the emergency rule, this would worsen the situation as it would demonstrate the government's instability," he said.

Other businessmen interviewed by The Nation were more sanguine.

"As this may concern the foreign community, the government should send a clear signal that the emergency rule will be temporary to maintain their confidence," said Pramon Suthivong, chairman of the Board of Trade.

Poomthep Malakul, general manager of Sylvania (Thailand), said foreigners could have positive and negative attitudes. Those in the latter group could try to discourage new investment in Thailand, "but they should understand that China, Vietnam and Malaysia - with high economic growth potential - also have their own measures to maintain stability. And their measures could be even more austere than Thailand's."

Somchai Kulinakin, president of Global Connections, said it would be worrisome if the emergency rule was imposed without any crisis. "But now we know that Thailand is not in a normal situation."

Suchart Chantaranakaracha, chairman of the Thai National Shippers' Council, said the emergency rule would lift political confidence among foreign and local businesses.

"Thailand has suffered from instability and this leads to low confidence. If this improves security, this should benefit the entire business community," he said.

Chen Namchaisiri, president of Asia Fibre, said the temporary measure would not weigh on the domestic business environment.

"The business community prefers stability and clarity. But the government should make sure that the measure is thoroughly reviewed and it should have a clear goal as well as a definite period in mind. If these can be assured, it should not rock business confidence," he said.

Santi Vilassakdanont, chairman of the Federation of Thai Industries, was all for the emergency rule if it was necessary to control the rally tomorrow.

"We're drafting a new constitution to pave the way for an election. Any gatherings or protests would worsen the situation. If the government can step in to contain the situation before the election, it would be preferable," he said.

Ajva Taulananda, vice chairman and chief corporate communications officer for CP Group, said that if the measure targets the rally tomorrow, this should not pose a threat to the business sector.

"We believe that investors - local or foreign - will understand why the government has to declare the emergency, if the government can explain things clearly to the public," he said.

Suriyasai Katasila, secretary-general of the Popular Campaign for Democracy, said he disagreed with the junta's move to crack down on anti-coup protesters.

"There's no need to declare a state of emergency because the demonstration has not yet caused any trouble," he said.

All sides should be patient, especially the military, he said, adding that emergency rule was not a good solution. "The emergency rule not only impinges on people's liberties but also destroys the country's image,' he said.

Trakoon Meechai, a Chulalongkorn political science lecturer, said the CNS seemed overly concerned about the rally. In fact the rally was not creating a disturbance, as it should.

He also compared today's situation with the People's Alliance for Democracy rallies when the former government did not impose emergency powers to crush the crowds.

"Personally, I think the CNS wants to tell PTV that they still have power to manage the rally," he said.

Democrat Party executive Nipit Intarasombat said it wasn't time to exercise the Emergency Decree, as the situation hadn't grown that severe. Exercising the decree in the capital at the moment could hurt the country's reputation.

"If a violent incident erupts or the situation goes beyond control such as physical attacks or destruction of state property, the decree could be used. If we employ it now, not only will it take a lot of resources to do a small job, [the government] will do what the protesters want. They want the government to use it so that they can say the government is ineffective at controlling the masses," he said.

The protesters could then attack the government as dictatorial and discredit it, he said.

The government had been acting democratically although it was formed after a military coup, he said. As another option, the government could still use criminal laws including libel against wrongdoers.