HONG KONG/SINGAPORE (BLOOMBERG) - A fresh wave of urgent policy coordination by global central banks has failed to restore stock investors' confidence in Asia.
With traders scrambling to sell riskier assets, benchmark indexes sank across the region, sending the MSCI Asia Pacific Index down as much as 4 per cent to a level unseen since 2016, based on closing prices. Futures on the S&P 500 Index hit trading limits once again, indicating a volatile week ahead for US equities following a surge on Friday.
Smaller bourses in Southeast Asia were again hammered, with gauges in Thailand and Philippines posting more than 5 per cent declines.
Singapore's Straits Times Index ended 5.25 per cent down. The STI is now trading in bear territory, down more than 25 per cent from its 52-week high.
While Australia's S&P/ASX200 Index had its worst day in history with an almost 10 per cent slump, shares in Japan failed to defy a short-lived rebound as the Bank of Japan's emergency measures disappointed investors.
Even Chinese equities, which had been resilient to the selling, registered losses of more than 3 per cent.
Monday's plunge has again highlighted investors' fragile confidence over a series of urgent central bank actions. Waking up to US Federal Reserve's 100-basis-point cut, the Bank of Japan said it would buy more assets including exchange-traded funds and corporate bonds while holding interest rate steady. The Bank of Korea slashed its benchmark interest rate to a record low of 0.75 per cent in an emergency move.
"Looming increases in new infection cases in the US and EU will ultimately overwhelm the Fed and other central banks' announcements in the near-term," said Mr David Chao, a market strategist for Asia Pacific (ex-Japan) at Invesco.
In the latest coronavirus outbreak developments, cases of infection have topped 166,000 worldwide, while deaths exceed 6,400.
"Nobody can call a bottom precisely - everyone needs to keep following the virus and the qualitative indicators," said Mr Justin Tang, head of Asian research at United First Partners in Singapore. "Most of the epidemic and contagion-led sell offs have lasted for three to five months so investors should keep that context in mind."