Singapore's Straits Times Index (STI) had its largest single-day fall since Oct 24, 2008, when the benchmark lost 8.3 per cent.
Following last Friday's relief rally, the blue-chip index opened 5.7 per cent lower. Sell-offs persisted as investors continued to liquidate assets, preferring to hold cash, in particular the United States dollar.
The STI closed 177.26 points, or 7.4 per cent, lower at 2,233.48 with all 30 counters in the red. This has left the STI firmly in bear territory, down 34.6 per cent from a 52-week high of 3,415.18 reached during the April 29, 2019 session.
Stimulus measures by policymakers worldwide are having little effect as fears of a global recession due to Covid-19 continue to mount.
As cases in the US and Europe grow, the sell-offs in markets should continue. IG market strategist Pan Jingyi said local equity performance is likely to remain "largely externally influenced" with stabilisation expected only once investors believe the worst of the pandemic is over.
Singapore Airlines (SIA) dived 66 cents, or 11 per cent, to $5.36. Yesterday, the national carrier cut 96 per cent of its planned capacity up to the end of next month, and described the Covid-19 pandemic as "the greatest challenge" it has ever faced.
UOB Kay Hian research analyst K. Ajith said: "SIA's steep decline in stock price to a 21-year low reflects ongoing concerns over cash burn and ability to meet debt obligations. Barring an announcement of state support, we believe the stock will continue to underperform the STI."
Sell-offs in Singapore real estate investment trusts (S-Reits) resumed with the iEdge S-Reit Index down 78.82 points, or 7.7 per cent, to 948.14. "The sharp sell-off among S-Reits has led to a spike in dividend yields, likely reflecting market concerns around refinancing risks that confronted the sector during the global financial crisis period," wrote equity research analysts at Morgan Stanley yesterday.
Top Glove was one of the few gainers, advancing 7 cents, or 3.6 per cent, to $2.01. With the Covid-19 outbreak likely to escalate, Citi Research analyst Megat Fais expects the glove maker to see strong performance in the second half of FY2020.
Anticipating strong orders from Top Glove's clients based in Europe and the US, who account for more than 60 per cent of sales, Citi raised its earnings estimates for the glove maker by 3 to 4 per cent.
Trading volume in Singapore was 1.43 billion securities; total turnover was $1.81 billion. Across the broader market, decliners trumped advancers 421 to 95.