STI's 7.4 per cent plunge worst in more than 11 years
Stocks tumble as curbs to fight virus take economic toll and spark recession fears
Singapore equities lost 7.4 per cent yesterday, their worst session in more than 11 years.
Fears that the coronavirus will damage the global economy significantly and for longer than expected saw the Straits Times Index (STI) close at 2,233.48, down 177.26 points.
This was the biggest one-day drop in the STI since its all-time record 8.3 per cent plunge on Oct 24, 2008, in the midst of the global financial crisis.
Singapore Airlines dropped 11 per cent to the lowest in more than two decades on plans to ground nearly its entire fleet due to travel restrictions.
"The global financial crisis was just a financial crisis, and China wasn't affected," Lim & Tan remisier Albert Tye told The Straits Times.
"Now, it's not only a global financial crisis, the real economy is also hit. People are not producing, spending. That's a different thing.
"It's real carnage, and how long it will last nobody knows."
Other South-east Asian stock markets also witnessed heavy selling yesterday as the economic impact from lockdowns and travel curbs, meant to slow the spread of the coronavirus, fuelled fears of a recession.
Amid the rising tide of lockdowns, governments have announced stimulus packages, and central banks across the region have eased monetary policies to shield their economies from the impact of the virus - but those measures have met with little success so far.
"The losses seen across Asian markets are unlikely to be meaningfully reversed anytime soon, with investors fearing a global recession amid the economic carnage left by Covid-19,"said FXTM market analyst Han Tan.
"... The sell-off in global equities is expected to continue amid the glaring void of risk-on catalysts, while investors' persistent clamour for dollar should maintain the downward pressure on Asian and emerging market currencies."
The Thai index ended 9.1 per cent lower in a low-volume trading session after triggering a circuit breaker that halted trading for thirty minutes.
Indonesian stocks fell 4.9 per cent after hitting circuit breakers five times in eight sessions.
Malaysian shares dropped 3.3 per cent after the government said it may consider extending movement restrictions by up to two weeks, even as the army was roped in to enforce a partial lockdown in the country.
The Philippine bourse pared early losses but still ended 0.7 per cent down as the central bank unveiled a US$5.8 billion (S$8.5 billion) programme to blunt the economic impact of the virus.
Elsewhere in Asia, the carnage continued.
Hong Kong stocks plunged yesterday with the Hang Seng Index plummeting 4.86 per cent, or 1,108.94 points, to close at 21,696.13.
China's benchmark Shanghai Composite Index also closed down, dropping 3.11 per cent, or 85.45 points, to 2,660.17.
European stocks dived more than four per cent in opening deals yesterday.
London's benchmark FTSE 100 index of major blue-chip companies tumbled 4.8 per cent to 4,943.51 points.
Frankfurt's DAX shed 4.6 per cent to 8,521.94 and the Paris CAC 40 sank 4.4 per cent to 3,870.06, compared with Friday's closing levels. - REUTERS, AFP