Singapore's Straits Times Index (STI) extended its losing streak to seven days yesterday, after stimulus measures announced by the European Central Bank (ECB) failed to lift sentiment as the global economy stares down the prospect of a Covid-19 induced recession.
US futures reacted positively following the ECB announcement, but their gains were wiped out by the time trading in Singapore started.
The blue-chip index was down 0.5 per cent at the opening bell, but sell-offs intensified by mid-morning. It closed 114.62 points or 4.7 per cent lower at 2,311. Twenty-eight of the STI's 30 counters finished with losses.
Market analyst Margaret Yang of CMC Markets said given that "Singapore is highly susceptible to external shock in terms of broad macro environment and stock market performance", the United States markets will need to stop "bleeding" before the local market can reach a bottom.
Disruptions to global trade and investment have also led to fears of a recession, the first in over a decade.
DBS economist Irvin Seah said a recession in Singapore "appears inevitable". The bank downgraded its full-year GDP growth forecast yesterday to -0.5 per cent.
With more trade restrictions kicking in globally, the STI's aviation-related counters continued to take a beating. Singapore Airlines lost $0.41 or 6.3 per cent to $6.12, and Sats shed $0.25 or 8 per cent to $2.87. Both are at multi-year lows.
Yesterday, DBS Group Research downgraded Sats to "fully valued", which implies an expected negative total return of more than 10 per cent in the next 12 months. DBS analysts lowered Sats target price to $2.66.
Its FY2021-2022 earnings forecasts were slashed by 23-25 per cent on lower throughput levels at Changi Airport, and lower performance from its Japan businesses and regional associates.
Real estate investment trusts (Reits) continued to be sold off, even as some are already trading at all-time lows. The sole gainer was Lendlease Reit, which added $0.03 or 5.6 per cent to 56.5 cents.
Yangzijiang Shipbuilding continued to move against the grain since securing a contract for 10 vessels on Monday. Its shares closed $0.03 or 3.8 per cent up at $0.82 and are up 3.1 per cent on the week.
Trading volume in Singapore was 2.09 billion securities; total turnover was $2.46 billion. Decliners trumped advancers 448 to 116.
Elsewhere in the Asia-Pacific, equity benchmarks were similarly battered, including those in Australia, China, Hong Kong, Japan, Malaysia and Thailand.