Last Friday, Singapore's Straits Times Index gained 99.74 points, or 4.3 per cent, to close at 2,410.74. Despite ending its losing streak, it closed the week down 223.26 points, or 8.5 per cent, from 2,634.00.
While markets in the region bounced back as investor sentiment improved after a series of measures were announced by governments and central banks, market watchers pointed out that they might not be sufficient to alleviate the economic fallout from Covid-19.
"The cuts from the central banks are very helpful in terms of allowing the markets to function well. But we really need to see a very strong fiscal response to support individuals and businesses as we move through this crisis," said Ms Johanna Kyrklund, chief investment officer and global head of multi-asset investments at Schroders.
The risks of a virus-induced recession continue to rise even with the slew of measures in place.
Despite the widespread actions being undertaken to limit the spread of the disease, they are likely not enough to avoid a recession, according to a report by ClearBridge Investments.
"Large portions of the economy, such as travel, restaurants and retail, are seeing substantial declines in activity if not outright shutdowns," noted the report.
Economists at Standard Chartered Bank have also lowered global gross domestic product growth forecast for this year to 1.6 per cent.
"The risk is that the virus shock persists - with outbreaks resuming in places that had brought the situation under control - or that we see a major credit shock, despite government interventions to limit systemic risks and mass layoffs," said the StanChart report published last Friday.
In Singapore, job vacancies are likely to fall further, given the uncertainties surrounding the virus outbreak, Manpower Minister Josephine Teo said last Friday.
Her comments followed the release of the Ministry of Manpower's job vacancies report for last year, which showed that the number of vacancies fell due to cautious hiring sentiments.
But the volatile markets may present some opportunities as the concerted fiscal and monetary stimulus by central governments may in part contribute to "signs of a short-term exhaustion and an imminent bear-market rebound", according to DBS Bank analysts in a report.
RISKS STILL PRESENT
The risk is that the virus shock persists - with outbreaks resuming in places that had brought the situation under control - or that we see a major credit shock, despite government interventions to limit systemic risks and mass layoffs.
STANDARD CHARTERED BANK, in a report published last Friday.
With China showing signs of recovery, they reckoned that some companies may benefit from China's recovery in manufacturing activity and domestic demand.
Meanwhile, they said, investors looking for safe havens should turn to companies with good cash flow, low gearing and good earnings visibility, as well as those less affected by the short-term supply chain disruption, sharp drop in consumer discretionary spending and impact of travel restrictions.