STI, travel stocks take a hit on news of new Covid-19 variant

Local shares and their regional counterparts took a battering yesterday on the back of fears over a new Covid-19 variant.

The concerns sent the Straits Times Index (STI) plunging 1.7 per cent or 55.25 points to 3,166.27 with losers easily outnumbering gainers 406 to 139 on trade of two billion shares worth $1.8 billion.

Singapore Exchange (SGX) market strategist Geoff Howie noted that yesterday's drop in the STI was the highest percentage decline seen in a day since the 2.2 per cent fall on May 14.

"This has taken the STI back to mid-October levels and trimmed the 2021 year-to-date total return to 15 per cent," Mr Howie added.

All 30 constituent stocks in the STI registered losses yesterday.

Genting Singapore and Singapore Airlines were the worst performers, both being in the firing line if there are further lockdowns.

Genting, the most heavily traded counter among index constituents with 56.4 million shares dealt, fell 4.2 per cent to 79.5 cents, while SIA dropped 3.8 per cent to $5.05.

The trio of local lenders also saw sharp declines. DBS Bank fell 1.7 per cent to $31.57, UOB lost 1.6 per cent to $27.11 and OCBC Bank ended at $11.55, down 1.6 per cent.

"The emergence of a heavily mutated new strain of Covid-19 in South Africa, with two cases... detected in Hong Kong today, has sent Asian investors scurrying for the exit door," said Oanda senior market analyst Jeffrey Halley.

Fears over the new strain, which experts say could be more infectious and vaccine-resistant than the Delta variant, saw Hong Kong's Hang Seng dive 2.7 per cent. Japan's Nikkei 225 index ended down 2.5 per cent, South Korea's Kospi fell 1.5 per cent and the FTSE Bursa Malaysia KLCI dipped 0.4 per cent.

Australian markets took a big hit as well with the ASX 200 falling 1.73 per cent, wiping A$41 billion (S$40 billion) off the market in what was its worst performance in two months.