Bangkok - Thai shares shot up 3.6 per cent Friday despite signs of escalating political instability, brokers said, as thousands of protestors surrounded Government House, demanding the resignation of the cabinet.

The Stock Exchange of Thailand index closed at 768.9, up 26.44 points in a sharp recovery from Thursday's 3-per-cent fall.

Puwadol Lapudomsuk, a stock analyst at Asia Trust Securities, said investors, buoyed by rising markets elsewhere in Asia, were buying up undervalued blue-chip stocks Friday and taking a wait-and-see attitude toward Thailand's political situation.

"If things deteriorate over the weekend, they will sell on Monday," Puwadol said.

Thousands of protestors laid siege to Government House Friday to call for the resignations of Thai Prime Minister Samak Sundaravej and his 5-month-old cabinet.

The protests have been sparked by a growing perception that the government has mismanaged the economy, which notched up 7.6 per cent inflation last month, as well as spent too much time on political issues such as manoeuvring for the return to power of Thaksin Shinawatra, a billionaire populist politician who was ousted in a bloodless military coup on September 19, 2006.

Most political analysts did not expect the demonstration to turn bloody because its leaders are skilled at avoiding violence and it is widely believed that elements within the military support the protestors. (dpa)