SINGAPORE - Singapore stocks enjoyed a relief rebound on Tuesday morning (Feb 25) even as most of Asia continued their slide as signs that the coronavirus outbreak here seems to be largely contained overcame bearish sentiment after a 1,000-point plunge in the Dow Jones Industrial Average overnight.
The Straits Times Index went into the midday trading break 25.40 points or 0.8 per cent higher at 3,167.60.
Tokyo led losses as its markets reopened to play catch-up with Monday's global selloff.
The Nikkei ended the morning 3 per cent lower, while Sydney shed 1.3 per cent and the Shanghai lost 0.9 per cent.
South Korea 's hard-hit Kospi index rose 0.7 per cent after a 4 per cent plunge in the previous session as new cases of coronavirus infections slowed and the government promised to support the economy.
The outbreak outside China is generally worsening, but it's a different picture for Singapore.
CMC Markets analyst Margaret Yang said: "The number of new cases here have been just one or two a day, or even none on Feb 23, which suggests the virus is largely contained in Singapore. So local investors are not as panicked, compared with those in US and European markets who are just starting to grapple with the outbreak."
She added: "It's rare to see the Singapore stock market outperforming the US markets.
"US equities have been trading at record highs and are overdue for a correction. And when news broke that the virus has spread outside of China, we saw a sudden collapse in confidence in US markets. But Asian stock markets have priced in the impact of the virus for more than three weeks already, so the correction has already taken place to some extent."
Still, Ms Yang warned that the worst isn't over yet, as it is unclear how the outbreak will develop in other countries and what the implications are for supply chain disruption, trade and global growth.
"We shouldn't be too optimistic at the moment because whatever happens worldwide will have an impact on Singapore," she noted.
Defensive blue-chip ST Engineering was the Singapore market's best performer in the morning session, jumping 4.76 per cent or 20 cents to $4.40 as at 11.40am.
Wilmar International notched a 3.7 per cent or 15 cents advance to $4.20, while Venture Capital rose 2.24 per cent or 36 cents to $16.44. Property developers also chalked up good gains, with CapitaLand up 1.91 per cent or 7 cents to $3.74, while UOL Group was up 1.65 per cent or 13 cents to $8.03.
But the rebound did not extend to all quarters. Far East Orchard lost 1.71 per cent or 2 cents to $1.15, while Yanlord Land shed 1.72 per cent or 2 cents to $1.14.
Parkway Life Reit, which hit a new record high of $3.74 last week as investors piled into the healthcare sector when the virus outbreak worsened, underperformed with a 1.09 per cent drop to $3.62.
Citi Research analysts said that the slower rate of new Covid-19 infections reported by South Korea and the declining rate of infection from China were the likely drivers for the relief rebound in Singapore and South Korea.
"Having said that, the situation remains fluid and headline sensitive with market participants monitoring the spread of infections in several countries/regions including Italy and the Middle East. While it is heartening to see some relief, price action will likely remain hostage to news flow for now," they added.
