Asia: Stocks slide after ECB measures fail to lift battered sentiment, STI down 4.5%

ASIAN stocks are mostly in the red on Thursday after early enthusiasm over the European Central Bank's (ECB) announcement of stimulus measures faded and fear returned amid the struggle to contain the Covid-19 pandemic.

"Consequently, we have certainly seen US futures reacting positively upon the announcement, though early gains appear to have been slowly wiped off as the gloom surrounding the coronavirus returned," IG market strategist Pan Jingyi said.

Overnight, the ECB launched a 750 billion euro (S$1.17 trillion) emergency bond-buying programme and US President Donald Trump signed into law the latest novel coronavirus relief bill which passed through both the US Congress and Senate last week.

At Thursday's open in Asia, most key regional benchmarks had a measured start but by the mid-morning, selling intensified as investors rushed to liquidate their assets. The US dollar remains king, appreciating against Asian currencies.

Singapore's Straits Times Index (STI), which opened 0.5 per cent lower on Thursday, continued to see sell-offs in the later half of the early session. As at 11.05am, the STI was trading 109.59 points or 4.5 per cent lower at 2,316.03.

"Singapore is highly susceptible to external shock in terms of broad macro environment and stock market performance. Therefore, we may need to see the US market stop bleeding before the local market can reach a bottom," Margaret Yang, market analyst at CMC Markets, said.

The spread of Covid-19 - initially viewed as an Asia-centric outbreak - has gone global in the past month, with cases outside China jumping 400 times since Feb 7, noted DBS economist Irvin Seah. 

With travel restrictions imposed by Singapore on more countries than initially expected, the tourism and leisure sector could be hit more heavily. Given Singapore is a small and open economy, disruptions to global trade and investment have also resulted in fears of a recession.

Mr Seah said: "A recession in Singapore appears inevitable, and we have revised our full-year gross domestic product growth forecast for 2020 to -0.5 per cent to reflect the recession scenario. Note that this comes with significant downside risks should the outbreak worsen."

In North Asia, Hong Kong's Hang Seng Index fell 850.69 points or 3.8 per cent to 21,441.13, and mainland China's Shanghai Composite Index lost 41.96 points or 1.5 per cent to 2,686.80. 

South Korea's Kospi was down 81.87 points or 5.2 per cent to 1,509.33. Japan's Nikkei 225, which was up in the first couple of hours of trading, fell 138.63 points or 0.8 per cent to 16,587.92.

In South-east Asia, Indonesia's Jakarta Composite Index shed 214.94 points or 5 per cent to 4,115.74, and Malaysia's Kuala Lumpur Composite Index was trading 22.11 points or 1.8 per cent lower at 1,216.90. Meanwhile, the Philippines' PSEi Index, which fell almost 25 per cent upon its return from a two day trading halt, was 585.52 points or 10.9 per cent lower at 4,749.85.

Elsewhere in the Asia-Pacific, Australia's commodity-heavy S&P/ASX 200 Index was up 86.80 points or 1.8 per cent to trade at 4,866.40.