STI rally loses steam as economic realities hit

THE recent rally in the Singapore equity market fizzled out on Thursday, as optimism gave way to the harsh reality facing the local economy due to the Covid-19 outbreak.

Before trading commenced, official advanced growth estimates showed a 2.2 per cent contraction in Q1, worse than street expectations of a 1.4 per cent decline. Singapore's manufacturing, services and construction sectors all recorded declines together for the first time since the Asian financial crisis in 1998.

With the city-state likely headed for its first full-year recession since 2001, the Ministry of Trade and Industry lowered its 2020 growth forecast to a range of -4 to -1 per cent.