The rally over the past couple of days fizzled out yesterday as optimism gave way to the harsh reality facing the local economy due to the Covid-19 outbreak.
Official growth estimates released before trading showed a 2.2 per cent contraction in the first quarter, worse than street expectations of a 1.4 per cent decline. Singapore's manufacturing, service and construction sectors all recorded declines together for the first time since the Asian financial crisis in 1998.
With the country headed for its first full-year recession since 2001, the Ministry of Trade and Industry lowered its 2020 growth forecast to a range of minus 4 per cent to minus 1 per cent.
The focus then shifted to the supplementary budget presented by Deputy Prime Minister and Finance Minister Heng Swee Keat, who announced that a record $48.4 billion is being committed to help Singapore weather the storm of Covid-19's impact on the economy.
The Straits Times Index (STI) traded more than 2 per cent down early on but clawed back most of the losses to end 17.91 points, or 0.7 per cent, lower at 2,487.56.
Singapore Airlines shares were halted before the market opened. Mr Heng said SIA, part of the bruised aviation sector, is considering a corporate action with the support of state investor Temasek. SIA has slashed over 96 per cent of its capacity and grounded most of its fleet.
As a proxy to SIA, subsidiary SIA Engineering shares jumped after the address by Mr Heng to end 12.6 per cent higher at $1.88. Ground handler Sats also received a boost, advancing 7.4 per cent to $3.32 after the Government unveiled a $350 million aviation support package.
Market performance was mixed across other sectors. Among telcos, Singtel fell 3.1 per cent to $2.52 while StarHub added 3.9 per cent to $1.32.
DBS Group Research analyst Sachin Mittal lowered 2021 earnings for the two by 9 per cent to 10 per cent on the basis that the Covid-19 outbreak will last through this year and curb travel into Singapore.
Food-and-beverage player Jumbo Group edged down 2.4 per cent to 20.5 cents. RHB Research joined DBS in lowering its recommendation for Jumbo to "neutral". RHB analyst Juliana Cai said yesterday: "As Jumbo's food-service brands largely cater to tourists, corporate dining and social gatherings, we expect its domestic sales to be significantly impacted before recovering in 2021."
Trading volume was 1.37 billion shares worth $1.82 billion, with losers outpacing gainers 287 to 149.
Elsewhere, it was a mixed bag. Australia, Malaysia and Taiwan rose but China, Hong Kong, Japan and South Korea were lower.