The health of the king is “still unstable”, the palace said late on Wednesday, adding that the 88-year-old was on a ventilator in hospital and battling a new infection.

Watch: Thais pray for hospitalized king

“Blood tests show he has an infection and his liver is working irregularly. The doctors have given him antibiotics and have corrected acid levels in his blood, placing him on a ventilator together with CRRT [Continuous Renal Replacement Therapy],” the Royal Household Bureau said in a new statement.

“His illness overall is still unstable,” the statement added.

That sparked market jitters inside Thailand this week as well as public prayers for his well-being.

Crown Prince Maha Vajiralongkorn, who spends much time outside the country, is his named successor.

“The Crown Prince is returning [to Thailand] and I will wait for him to grant me audience so I can brief him on the government’s work,” Prime Minister Prayuth Chan-ocha, a former army chief who seized power in 2014, said via text message.

Thai media travelling with Prayuth in the eastern province of Chonburi said the junta chief had abruptly cancelled all official engagements on Wednesday afternoon and returned to the capital.

No reason was given, according to media which reported the cancellation, including the major dailies Matichon and Thai Rath.

Security outside the hospital where Bhumibol is being treated was increased Wednesday with a hospital official saying they expected the Crown Prince to visit his father.

“The security has been stepped up because the Crown Prince is coming to the hospital,” a spokeswoman at Siriraj hospital said, asking not to be named.

Bhumibol’s health is a taboo subject and palace officials maintain tight control on news about his condition.

A draconian lese majeste law also makes public discussion of the succession all but impossible.

Sunday’s statement was noticeably grim in its prognosis. Previous statements have tended to end on a positive note after successful treatment.

The king has battled a range of ailments in the last two years including regular infections, breathing difficulties, renal failure and hydrocephalus – a build-up of cerebrospinal fluid commonly referred to as “water on the brain”.

The latest announcement caused Thailand’s stock market to dip and the baht to fall against the dollar this week.

The main bourse plunged after the lunch break on Wednesday, dropping as much as 6.8 per cent. By mid afternoon it had recovered somewhat to 3.45 per cent down. On Monday it declined 3.15 per cent and on Tuesday it fell 1.02 per cent.

The Thai baht was headed towards its steepest weekly drop in three years, trading at 35.90 on Wednesday, according to Bloomberg data.

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.

Most Thais have known no other monarch and Bhumibol is widely seen as a unifying symbol in a country rocked by decades of political turbulence and divisions.

The heir, 64, has yet to attain his father’s widespread popularity.

Since Sunday’s announcement, many Thais have started wearing pink in the belief it will bring the king good luck.

A crowd of followers gathered outside the hospital to pray.

“It feels like he is getting worse this time,” said Somchit Naravichit, 58, tears welling in her eyes.

“Millions of Thais are sending him supports, praying for him and wanting him to get well soon,” she said.

Suwanna Kaennumtiang, a 62-year-old woman holding a portrait of the king, added: “The king is very important to us because he has done everything for the people. He is like my angel. I pray to his photo on my bedside everyday.”