On Friday (28 Feb), Singapore stocks plunged to a 15-month low, which suggests that the global markets are increasingly convinced of the possibility that the Covid-19 outbreak will result in a pandemic.
After reaching a 15-month low at 3,008.460, the benchmark Straits Times Index (STI) fell by 3.2 per cent to close at 3,011.08.
This also shows that the winners are overtaken by losers at 103 to 406.
On Friday as well, the carrier Singapore Airlines stated that the pay for its senior workers will be slashed 15 per cent even as its stocks declined by 3.85 per cent.
Last week, the earlier optimism that the outbreak will be successfully contained in China has now been supplanted by the worries that the outbreak is now transmitting globally across countries.
The efforts poured into implementing measures to combat the virus have crippled the global financial markets, the economy and the supply chains.
According to Esty Dwek of Natixis Investment Managers in a market commentary to CNA, “Equities are on track for their worst week since 2008, and we believe the next few days could continue to be difficult… However, we also believe that the rebound can be quick once fears ease, even if we do not see a V-shaped economic recovery.”
Aside from Singapore, other international bourses that also experienced a decline of more than 3 per cent are Seoul, Tokyo, Sydney and Shanghai.
On Thursday (27 Feb), the Dow plunged by almost 1,200 points, making it the biggest points loss on record. This 4.4 per cent decline also represented the worst performance in two years.
Also, Nasdaq and S&P 500 collapsed by more than 4 per cent.
Similarly on Friday, the slump experienced by the European stock markets kept persisting, as shown by the Frankfurt’s benchmark DAX 30 stocks index plunging 5.2 per cent in morning deals.
Within just a week, leading European stock markets crashed about 12 per cent, whereas London’s FTSE has reverted back to levels observed back in late 2018.
According to the market strategist at IG, Pan Jingyi in her statement to CNA, the current situation is “a race to the bottom for US indices such as the Dow and the S&P 500 index, except it may still be too early to call a bottom given the uncertainty around the matter of the coronavirus impact.”
New concerns over global crude oil demand have been set alight by the panic caused by the Covid-19 spread, which has led to oil prices plunging to the lowest levels since more than a year ago.
April delivery of New York’s WTI crude oil and Brent oil fell to a trough of US$44.95 and US$50.05 per barrel each respectively.
“Another day, another sell-off… Risk assets took a significant step lower on Thursday as market players continued to squirm with unease over the growing coronavirus crisis,” as the analyst at energy consultancy PVM Associates, Stephen Brennock noted.
