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Stock plunge in Asia continues after Wall Street's worst session since 1987; STI down 5.1%
ASIAN stocks tumbled further on Friday as a coronavirus-induced recession gains steam, and fears mount over whether support measures by governments globally are adequate to stem the decline.
This comes after key Wall Street benchmarks on Thursday plummeted and registered their worst single-day drops since the "Black Monday" stock market crash of 1987.
Following an announcement by the World Health Organization labelling Covid-19 a pandemic and the US move to temporarily halt travel from Europe - with the exception of the UK - for 30 days, the Dow Jones Industrial Average slumped 10 per cent, the S&P 500 skidded 9.5 per cent, and the Nasdaq Composite Index shed 9.4 per cent.
In Europe, London's FTSE 100 nosedived by 10.8 per cent, its worst drop since 1987, while Germany's DAX 30 had its largest intraday fall since 1989.
The MSCI All-Country World Index is now down by more than 25 per cent this year. Even safe-havens such as gold were trading lower as frantic investors moved to cover margin losses.
At the commencement of Friday trading, Singapore's Straits Times Index (STI) fell 5 per cent, the most at the opening bell since October 2008. The STI fell by more than 6 per cent in the opening minutes but retraced some of those losses. As at 10.23am, the STI was down 136.47 points or 5.1 per cent down at 2,542.17.
The STI, like other benchmarks globally, have entered bear territory, a period defined when prices in securites fall by more than 20 per cent from their recent highs. At current levels, the STI is down 25.6 per cent down from its 52-week high of 3,415.18, which the index achieved during trading on April 29, 2019.
Due to the increased severity of the Covid-19 outbreak, private sector economists are now expecting the second package of support measures in Singapore to combat the economic strain brought about by the coronavirus to be larger than the first S$4 billion package.
In North Asia, Japan's Nikkei 225 index dived 1,739.21 points or 9.4 per cent to 16,820.42 and South Korea's Kospi index sank 138.53 points or 7.6 per cent to 1,695.80.
While not as badly bruised, Greater China markets continued to take sizeable hits. Hong Kong's Hang Seng Index fell 1,417.84 points or 5.8 per cent to 22,891.23, and mainland China's Shanghai Composite Index lost 95.71 points or 3.3 per cent to 2,827.78.
Among South-east Asian markets, Indonesia's Jakarta Composite Index dropped 258.36 points or 5 per cent to 4,895.75, and Malaysia's Kuala Lumpur Composite Index was trading 76.97 points or 5.4 per cent lower at 1,342.46.
Elsewhere in the Asia-Pacific, Australia's commodity heavy S&P/ASX 200 index erased 383.50 points or 7.2 per cent to trade at 4,921.10.
With more cities being quarantined, travel plans scuppered and mass gatherings discouraged - even sports events being postponed, the hit on sentiment is showing little sign of abating.
"Global supply chains are no longer just 'disrupted' but are now in the process of shutting down completely. And even more worrisome is that the worst-case scenario and the sum of all fears are culminating with the view that policymakers remain well behind the curve," said AxiCorp chief global markets strategist Stephen Innes.