Thailand's stock exchange plunged on Monday after the palace said hospital-bound King Bhumibol Adulyadej's health was "not stable" in an update that has raised fears for the 88-year-old.

Bhumibol is the world's longest-reigning monarch and beloved by many in Thailand.

But he has not been seen in public for nearly a year as he battles a series of ailments in a Bangkok hospital.

His health is a taboo subject with palace officials maintaining tight control on news while a draconian lese majeste law makes public discussion of or planning for his succession all but impossible inside the kingdom.

Privately many business leaders -- both domestic and foreign -- fret that his demise could lead to economic instability, especially as there is no official discussion on how the country will handle his passing.

By the lunchtime break stocks on Thailand's primary bourse had plunged by 2.97 percent, its lowest fall in nearly a month.

The baht also declined to a two-month low of 35.080 against the dollar mid morning, a sixth consecutive day of losses, according to Bloomberg data.

In recent months the palace has begun issuing more regular updates on Bhumibol's hospital treatment that point to a string of major health issues including renal failure. 

The stock market often dips after such announcements.

Over the last two years he has been treated for bacterial infections, breathing difficulties, heart problems and hydrocephalus -- a build-up of cerebrospinal fluid often referred to as "water on the brain".

The latest statement issued by the Royal Household Bureau on Sunday evening said a ventilator was deployed after the monarch's blood pressure dipped following procedures to prepare him for dialysis and to change a tube that helps drain fluid from his spine.    

The medical team are watching his symptoms and giving treatments carefully because the overall symptoms of his sickness are still not stable," the statement said.

Christopher Wong, a foreign-exchange strategist at Malayan Banking Bhd. in Singapore told Bloomberg that the latest update "could weigh on investor sentiment".

Bhumibol's reign has spanned seven tumultuous decades and his frail health is a cause of great public concern for Thais, most of whom have never known life under another king. 

Analysts say anxiety over the end of Bhumibol's reign has aggravated the past decade of political conflict in Thailand, with elites jostling for influence.

But open discussion of his legacy and the future of the institution is all but impossible because of the lese majeste law.

Use of the law has surged under the ultra-royalist generals that seized power in a 2014 coup.

His named successor, 64-year-old Crown Prince Maha Vajiralongkorn, has yet to attain his father's widespread popularity.

Source: AFP