In a skillet or wok over medium-high heat, cook the chicken in the oil until browned all over.
Lower the heat to medium. Add the curry paste and sugar, stirring together in the pan until they blend well and coat the chicken. Add the coconut milk and the chicken stock and bring to a boil. Cook until the liquid is reduced by about half, and beginning to thicken.
Add the fish sauce, peanuts, basil, and ground chili or cayenne. Lower to a simmer and cook until the sauce thickens. Serve with jasmine rice or basmati rice on the side. It's also good with rice noodles.