Singapore stocks joined their counterparts across Asia and the rest of the world in an accelerating race to the bottom amid rising coronavirus worries, dashed hopes of a stimulus in the United States and growing fears that the recession could be deeper than expected.
It was sell, sell, sell from the opening bell as the Straits Times Index (STI) finished 177.26 points, or 7.4 per cent, down at 2,233.48. This was a level it had not closed at since May 2009 and its biggest one-day drop since its record 8.3 per cent plunge on Oct 24, 2008, during the global financial crisis.
And yet the STI was not even Asia's worst performer. Thailand plunged 9.1 per cent, while India saw its stocks tank 13 per cent. South Korea and Australia each lost more than 5 per cent, while Hong Kong and Jakarta each lost nearly 4.9 per cent. The only exception was Japan, which rose 2 per cent.
The market rout came as a rising tide of national lockdowns threatens to overwhelm frantic efforts on the part of policymakers to cushion what is likely to be a deep global recession. Indian and US cities saw tougher curbs yesterday.
But senators in the US failed to pass a motion to advance legislation on stimulus worth almost US$2 trillion (S$2.9 trillion) to help the world's biggest economy deal with the impact of the pandemic.
"As the number of Covid-19 cases spikes in places that aren't locked down, we can't rule out the possibility of the US moving into a complete lockdown, which will be another blow to Singapore. If the US is in a severe recession, so will the world economy," Maybank Kim Eng senior economist Chua Hak Bin said.
"Singapore thrives on an open trading system. If the world is increasingly shutting borders, a big chunk of Singapore's economy will be at a standstill," he added.
Compounding the worries, Singapore confirmed 54 new cases yesterday - its highest in a day - of which 48 were imported.
Some reprieve may come on Thursday when Deputy Prime Minister Heng Swee Keat presents a supplementary budget and details measures to help the economy cope with the pandemic.
Meanwhile, Standard Chartered Bank joined the growing chorus of voices predicting a recession in Singapore this year, saying the economy will shrink 2 per cent.
Lim & Tan remisier Albert Tye said: "The market is in despair. Investors here have easily lost 30 per cent off their stock portfolios.
Among the biggest blue chip laggards yesterday was Singapore Airlines (SIA), whose stock plunged nearly 11 per cent, or 66 cents, to its lowest in over two decades at $5.36, after the group said it will slash 96 per cent of its scheduled capacity till end-April in what it called "the greatest challenge" it has faced in its existence.
This will result in the grounding of around 138 SIA and SilkAir aircraft, out of a total fleet of 147, SIA said.
Dr Chua said: "What is the point of running an airline now when you can't fly to and from a number of destinations indefinitely? There should be a lifeline extended to companies under distress in aviation and hospitality. You are not bailing out bad companies, just allowing them to survive this crisis."
The rout has also slashed valuations of Genting Singapore and other blue chips to levels described as "too cheap to ignore". The casino operator's shares fell 9.48 per cent, or 5.5 cents, to 52.5 cents.
And retail investors are noticing, given a rising number of Central Depository trading accounts opened in the past week, said CIMB Private Banking economist Song Seng Wun. "But as long as the healthcare crisis remains, any rebound will be temporary," he cautioned.