STI finishes at 4-year low on Thursday as Covid-19 driven global rout continues

SINGAPORE'S Straits Times Index (STI) continued to bleed on Thursday, finishing at a four-year low after the World Health Organization labelled Covid-19 a pandemic and the US temporarily halted travel from Europe - with the exception of the UK - for 30 days.

The local benchmark's counters were flashing red from the opening bell, diving by as much as 4.1 per cent in the early session. It closed 105.08 points or 3.8 per cent lower at 2,678.64, the lowest closing level since March 2016.

All but one of the STI's 30 components ended the day in the red.

Before trading in Asia commenced, the stage had already been set for further sell-offs in the region's equity markets after Wall Street fell by almost 5 per cent on Wednesday.

The suspension of all travel from Europe, announced by US President Donald Trump on Thursday morning in Asia, is likely to hit the already battered leisure and travel sectors further. 

IG market strategist Pan Jingyi said: "With approximately a fifth of the visitor arrivals to the US being accounted for by both Western and Eastern Europe region, this would further strain the related sectors."

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Mr Trump revealed the deferment of US$200 billion in tax payments. However, Jeffrey Halley, Oanda's Asia-Pacific senior market analyst, pointed out that the US president did not announce "any new concrete measures" such as a large-scale payroll tax cut to buffer the economy against the Covid-19-influenced slowdown.

"That has probably disappointed markets more than anything," he remarked.

Even safe-haven gold fell as traders closed their long positions to meet margin calls as equities dived.

Oil prices also slipped, with West Texas Intermediate and Brent trading around US$31 a barrel and US$33 a barrel, respectively.

The depressed prices for black gold continued to hit the STI's conglomerate Keppel Corp and Sembcorp Industries. Keppel shed S$0.40 or 7.2 per cent to S$5.15 while Sembcorp fell S$0.06 or 3.7 per cent to S$1.58.

Other oil sensitive counters were similarly affected. China Aviation Oil dropped 5.5 Singapore cents or 5.7 per cent to S$0.91, and Rex International dipped S$0.01 or 7.3 per cent to 12.7 Singapore cents.

The sole gainer on the STI was media and property group, Singapore Press Holdings (SPH). Shares in the company, which publishes The Business Times, closed S$0.04 or 2.1 per cent higher at S$1.91.

Singapore bank shares continued their run of losses. DBS dropped S$0.81 or 3.9 per cent down at S$20.20, OCBC Bank finished S$0.39 or 4.1 per cent lower at S$9.11, and United Overseas Bank ended the day at S$20.53, falling S$0.84 or 3.9 per cent.

Trading volume in Singapore was 1.96 billion securities while total turnover came to S$2.63 billion. Across the broader market, decliners trumped advancers 449 to 99.

Elsewhere in the Asia-Pacific, benchmarks in Australia, China, Hong Kong, Japan, Malaysia, South Korea and Taiwan registered heavy losses.