Singapore stock market plunges 3.2% as COVID-19 fears fuel global turmoil

Singapore stock market plunges 3.2% as COVID-19 fears fuel global turmoil

A man wearing a mask in precaution of the coronavirus looks on along the Marina Bay Waterfront Prom
A man wearing a mask in precaution of the coronavirus looks on along the Marina Bay Waterfront Promenade in Singapore February 19, 2020. REUTERS/Edgar Su

SINGAPORE: Singapore stocks spiralled downwards on Friday (Feb 28) to a 15-month low, as global markets sold off on the rising possibility that the coronavirus outbreak would become a pandemic.

The benchmark Straits Times Index tumbled 3.2 per cent to close at 3,011.08, after touching a 15-month low of 3,008.460.

Losers outpaced winners at 463 to 103.

Singapore Airlines, which on Friday announced up to 15 per cent pay cuts for its senior employees, fell 3.85 per cent.

READ: SIA announces pay cuts for management to reduce manpower costs amid COVID-19 outbreak

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Hopes that the outbreak can be contained in China have been replaced this week by worries that infections are spreading around the globe. Measures to contain the virus have wreaked havoc on supply chains, the world's economy and financial markets.

"Equities are on track for their worst week since 2008, and we believe the next few days could continue to be difficult," Ms Esty Dwek of Natixis Investment Managers said in a market commentary to CNA.

"However, we also believe that the rebound can be quick once fears ease, even if we do not see a V-shaped economic recovery," she added.

READ: WHO warns no country will be spared, as fight against COVID-19 ramps up

READ: China reports 44 new coronavirus deaths, toll rises to nearly 2,800

Tokyo, Shanghai, Sydney and Seoul were among the bourses that fell more than 3 per cent.

The Dow suffered its biggest points loss on record on Thursday, shedding almost 1,200 points, while its 4.4 per cent drop marked the worst performance in two years. The S&P 500 and Nasdaq also tanked more than 4 per cent.

European stock markets extended their coronavirus-fuelled slump on Friday, with Frankfurt's benchmark DAX 30 stocks index crashing 5.2 per cent in morning deals.

Leading European stock markets have tumbled around 12 per cent in just one week, while London's FTSE 100 is back at levels seen in late 2018.

"It is a race to the bottom for US indices such as the Dow and the S&P 500 index, except it may still be too early to call a bottom given the uncertainty around the matter of the coronavirus impact," said Ms Pan Jingyi, market strategist at IG, in a note to CNA.

The spreading virus panic also stoked fresh concern over global crude demand, sending oil prices to their lowest levels in more than a year.

Brent oil for April delivery sank as low as US$50.05 per barrel, while New York's WTI crude for the same month tumbled to a trough of US$44.95.

"Another day, another sell-off," remarked analyst Stephen Brennock at energy consultancy PVM Associates.

"Risk assets took a significant step lower on Thursday as market players continued to squirm with unease over the growing coronavirus crisis."

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Source: CNA/Agencies/aj(hm)

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