Singapore shares plunge the most in over 11 years over virus fears
Epidemic fears lead to tumble in stocks across markets
Singapore shares fell the most in more than 11 years yesterday, leading a broad tumble in South-east Asian stocks, as fears over the economic impact of the coronavirus epidemic and a crash in oil prices triggered a steep sell-off.
Oil prices plunged as much as 31.5 per cent - the most since 1991 - after Saudi Arabia started a price war following Russia's refusal to agree to a further steep cut in oil output.
Broader Asian markets fell 4.4 per cent in their worst day since August 2015 as the number of people infected with the virus passed 110,000 across the world, with the outbreak reaching more countries and causing more economic damage.
"The market continues to be fear- and headline-driven, and it is difficult to imagine a durable and broad-based recovery in risk sentiments soon," Mr Vishnu Varathan, a senior economist at Mizuho Bank, said in a note to clients.
Oil- and virus-driven risks are likely to deepen the sell-off in Asian markets, he added.
Singapore, Thailand, Philippines, Indonesia and Vietnam ended the day more than 6 per cent lower.
Thai stocks plunged 8 per cent in their worst intraday session since December 2014.
The Singapore bourse ended 6 per cent down in its worst session since October 2008. Petrochemical company Sembcorp Industries tumbled nearly 10 per cent to hit a more than 15-year low.
Malaysian equities fell 4.1 per cent to hit a more than eight-year low.
Japan's Nikkei dropped 5.1 per cent and Australia's commodity-heavy market closed down 7.3 per cent, its biggest daily fall since the 2008 global financial crisis.
Hong Kong stocks also tumbled 4.2 per centyesterday, its steepest daily fall in more than two years.
European markets did not fare any better either with hefty losses in early trade with London dropping more than 8 per cent, Frankfurt falling more than 7 per cent and Paris almost matching those losses.
And the US joined the rout.
Trading on stock exchanges was halted immediately after opening yesterday, as the S&P 500 fell 7 per cent, triggering an automatic 15-minute cutout put in place after the 2008-2009 financial crisis.
Government policymakers will need to implement "substantial" targeted fiscal, monetary and financial market measures to combat the economic impact from the epidemic, International Monetary Fund chief economist Gita Gopinath said yesterday.
In a blog posting on the IMF's website, Ms Gopinath said her top recommendations involved putting cash directly into the hands of households and businesses.
Broad interest rate cuts may instil confidence but would be effective in stimulating activity only once business conditions normalise, she added. - AFP, REUTERS