BANGKOK, Thailand (AP) -- Thai stocks plummeted almost 20 percent at one point Tuesday in the most dramatic turmoil to hit financial markets here since the 1997 Asian financial crisis, rattling markets in the region.

Investors dumped stocks in Hong Kong, India, Indonesia and Malaysia amid contagion concerns that the plunge might to spread through the region and trigger the kind of slump that wracked Asia nearly ten years ago.

The Stock Exchange of Thailand's benchmark SET Index plunged as much 19.5 percent before recovering some to close at 622.14, down 14.8 percent.

It was the market's biggest drop ever, the stock exchange said. The hardest hit sectors were banking, energy and telecommunications.

The plunge came after the Bank of Thailand late Monday announced its toughest measures yet to clamp down on speculative inflows that have lifted the Thai currency, the baht, to a nine-year high of 35.09 to the U.S. dollar Monday. On Tuesday, the baht weakened to 35.93 per dollar.

Starting Tuesday, all banks are required to hold in reserve for one year 30 percent of capital inflows that aren't trade- or services-related, or repatriation of Thai residents' investments abroad, the bank said. Also, foreign investors must pay a 10 percent penalty unless they keep funds in the country for a year.

"Foreign investors are nervous about the measure introduced by the central bank," said Sukhbir Kanijoh, an analyst with Kasikorn Securities in Bangkok.

"Many are also worried that more measures will be introduced to curb the strengthening baht that will make the Thai market even less attractive," he said. "Selling is heavy and selling orders will likely continue throughout tomorrow, unless there is a revision to the measure."

But David Cohen, chief of Asian economic forecasting for Action Economics in Singapore, said the events in Thailand are fundamentally different from the events surrounding the 1997-98 Asian financial crisis.

The big problem ten years ago was currency weakness; now, it's currency strength.

"I would emphasize the contrast to the situation in '97 and '98. The measures the Bank of Thailand felt obliged to impose were to resist the appreciation of their currency," Cohen said.

Ben Kwong, chief operating officer at KGI Asia in Hong Kong, also said regional economies are now "relatively healthy" compared to the situation in 1997.

"The situation is different now. Many regional economies have achieved more balanced accounts and currencies are likely to go up, not down," he said.

Thailand's measures "aim to change the rules of the game and were a blow to foreign investors' confidence. The big market reaction is understandable," he said. "But there shouldn't be any long-term effects on Hong Kong."

The Stock Exchange of Thailand on Tuesday called for the central bank to review its decision to impose new rules aimed at weakening the baht, saying the move did prompted foreign investors to dump Thai shares.

Effectively, the central bank's new rules mean that if a foreign investor allocated the equivalent of 100 million baht to the Thai bond market, the investor could only buy 70 million baht of bonds, while the remainder would be withheld by the central bank, earning no interest. If the investor wanted to withdraw the money in less than a year, only two-thirds of the amount withheld would be returned.