SINGAPORE: Singapore's stock market slumped as much as 3 per cent to its lowest in 20 months on Thursday (Oct 11), joining a global equity rout after a sell-off on Wall Street spooked investors.
Investors sold across the board amid a confluence of factors, including rising interest rates in the United States, a heated Sino-US trade battle as well as IMF warnings about global financial stability and growth risks.
The key Straits Times Index (STI) fell as low as 3,035.2, the lowest since on Feb 3 last year, before gaining back some ground to close down 2.7 per cent at 3,047.39.
The STI was weighed down by heavy losses in financials, with UOB, DBS and OCBC closing down about 2.5 per cent each.
In all, 2.1 billion shares worth S$1.6 billion were traded in Singapore on Thursday, with losers outpacing gainers at 429 to 72.
Across the region, the Shanghai Composite Index plunged more than 6 per cent before recouping some ground to end the day down 5.22 per cent at 2,583.46 points, levels not touched since Nov 25, 2014.
In Hong Kong, the Hang Seng Index closed down 3.5 per cent at 25,266.37 points, its lowest level since May 19, 2017.
South Korean stocks plunged 4.4 per cent to 2,2129.67, the sharpest in almost seven years, while the Nikkei plunged 3.9 per cent to 22,590.86.
The steep drop in Asia followed Wednesday's plunge in New York, with the Dow Jones dropping nearly 830 points - the biggest fall since February.
"All bets are off," warned Mr Stephen Innes, head of Asia-Pacific trading at OANDA, adding that markets were "fraught with peril".
"The US equity bloodbath is taking no prisoners in Asia as a sea of red greets investors at the open, as equity deleveraging and liquidation intensifies," he said.
Over the past few months, an intensifying trade war between the United States and China has also hit risk assets on worries about global growth.
The sharp fall on Wall Street on Wednesday was bad enough to attract the attention of US President Donald Trump, who said the sell-off was in fact a long-awaited "correction”, and that the Federal Reserve, which has been raising rates, had gone "crazy".
Mr Steven Leung, sales director at brokerage UOB Kay Hian, said the impact of the US equity sell-off and trade war concerns were weighing on stocks and would endure across Asia.
"We haven't really seen such a big downturn in US stocks for quite some time. Markets are not sure how long this will continue for," he said. "The market is also worried that US-China relations will get even worse."