At least eight blasts rocked Bangkok on New Year's Eve

During Wednesday trading, the first time the Bangkok market has been open since the attacks, the SET index fell before recovering to close 3% down.

Thailand has been bracing itself for a downturn in the wake of the bombs, especially in the tourist sector.

Despite the predicted fall, the effect was far less than two weeks ago, when the market plunged 15% in one day.

The sharp downturn in December followed central bank plans to limit the amount of money that could be withdrawn by investors.

The plan was then partially rescinded to exclude foreign stock investments, causing the market to bounce back 11% the following day.

'Business centre'

On Wednesday, the SET index fell to as low as 654.02 before recovering to close down 20.59 points at 659.25, down 3% from Friday, the last day of trading in 2006.

However, the bombs have had a limited impact on bonds or Thailand's currency, the baht, which closed slightly stronger against the dollar compared to close on Friday.

The blasts in Bangkok have not only shocked the people of this normally peaceful city - they have also increased fears of political and economic instability.

"The damage caused by the bombings is huge because it makes people think Thailand is unsafe - especially since the incident happened in Bangkok, which is the business centre," Pornsilp Patcharintanakul, deputy chief of Thailand's Board of Trade, told the AFP news agency.

Thailand's military government has hinted that it believes elements loyal to former Prime Minister Thaksin Shinawatra, who was ousted in a September coup, may have been to blame for the attacks.

But Mr Thaksin has denied any involvement, saying the bombs bore all the hallmarks of Muslim militants fighting in the country's south.

The tourist sector is also vulnerable. Although none of the three people who died in the explosions were tourists, nine foreigners were among the injured.

At close of stock market trade on Wednesday shares in Thai Airways International lost 3.50 baht to 40.75.