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Singapore shares sink 1% on China virus fears, growth worries
SINGAPORE stocks slumped further on Tuesday, in line with most regional markets, as the emergence of a new virus from China and a sluggish economic outlook weighed on sentiment.
The Straits Times Index was down 1.09 per cent after lunchtime, but eventually regained some ground to close at 3,247.17, down 1 per cent or 32.92 points.
Decliners outnumbered advancers 350 to 138, or about three counters down for every one on higher ground. Trading remained active, with 2.67 billion securities worth S$1.11 billion changing hands.
Linus Loo, head of research at Lim & Tan Securities, told Reuters on Tuesday that concerns over the spread of the coronavirus in China affected market sentiments. "Unfortunately, it's coming at a bad time because it's the travel season in China ahead of the New Year celebrations," he said.
CMC Markets analyst Margaret Yang also thought markets "priced too little in", in terms of the virus spreading across multiple Asian cities from Wuhan, in a situation that harks to the Sars outbreak of 2003.
In addition, the current situation may be worsened by the millions of people travelling across China for the Chinese New Year, she said.
Adding to investors' worries on Tuesday was the International Monetary Fund, which had trimmed its growth forecasts for 2019 and 2020 to 2.9 per cent and 3.3 per cent overnight, in light of a global economic outlook which “remains sluggish”.