SINGAPOREBENGALURU, Oct 4 Reuters A shooting tragedy in a Bangkok mall adds to a doublewhammy of rising rates and government spending worries that has hammered Thai assets and soured bets on the recovery of Asia39;s tourism giant.

Thai tourism stocks slid 1.6 on Wednesday, dragging the benchmark index to its lowest since January 2021, while a stronger dollar sent the baht to an 11month low.

Foreign selling pressure has been building for weeks, with some 1.65 billion leaving Thai stock and bond markets since the start of September and coming to a head with a surprise rate hike and fiscal spending promises in recent days.

Tenyear Thai government bond yields are now up 75 basis points in little more than three weeks, according to LSEG data, a move even larger than that in U.S. Treasuries.

There is constant selling in the Thai bond market with very thin liquidity. Bidoffer spreads are wide and it39;s difficult to get anything done, said Toreck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore.

The market was expecting no hike, he said.

The Bank of Thailand unexpectedly raised rates last week and said it expected growth and inflation to pick up, leaving the door open to further hikes in future.

Stocks have slid heavily since and are down more than 8 from the end of August, larger than the 5 fall in MSCI39;s Emerging Markets Asia index over the same period. September equity outflows exceed those from peer markets in the region such as the…