Worsening Covid-19 outbreaks drive regional indices lower; STI down 1.2%

REGIONAL indices on Wednesday were weighed down by coronavirus fears amid the worsening situation in countries such as India and Japan, and as they tracked Wall Street's decline for the second straight day.

On Wednesday, India reported 2,023 Covid-19 fatalities, its highest single-day death toll so far. In Japan, broadcaster NHK reported that the government is considering a state of emergency for Tokyo and Osaka as new Covid-19 case numbers surge.

The Nikkei 225 Index ended the day 2.03 per cent or 591.83 points lower at 28,508.55. Meanwhile, the benchmark Kospi slipped 1.52 per cent or 49.04 points to close at 3,171.66. The Hang Seng Index closed down 1.76 per cent or 513.81 points, at 28,621.92.

On the local bourse, the benchmark Straits Times Index (STI) fell 1.16 per cent or 37.11 points to 3,155.06.

Among the STI constituents, Yangzijiang Shipbuilding (YZJ) was the top gainer for the day, advancing 0.74 per cent or S$0.01 to S$1.37.

On Monday, YZJ announced that it had recently entered into shipbuilding contracts for another 15 vessels, with a total contract value of US$0.97 billion.

Meanwhile, Keppel Corporation was the top decliner for the day, falling 2.57 per cent or S$0.14 to end at S$5.31. DBS was the second worst performer on the index, closing 2.14 per cent or S$0.62 lower at S$28.40.

DBS on Tuesday announced that it will acquire a 13 per cent stake in Shenzhen Rural Commercial Bank, which will make it the largest shareholder of the Chinese bank.

Krishna Guha, equity analyst at Jefferies, said that while the investment "doesn't put dividend at risk, it may elongate the time needed to fully restore dividend to pre-Covid level, especially as other (merger and acquisition) opportunities arise".

On the broader market, decliners outnumbered advancers 324 to 186 on Wednesday, as 1.81 billion securities worth S$1.53 billion changed hands.

"Asian equities edge lower in sympathy with Wall Street," noted Jeffrey Halley, senior market analyst for Asia-Pacific at Oanda. He added: "Overall, the price action looks corrective after a strong performance over the past week by equities in a market being driven by short-term risk sentiment. A thin data calendar means that the status quo is likely to continue for the remainder of the week, although markets will have more to get their teeth into over the next two weeks."