Southeast Asian stock markets ended sharply lower on Friday on fears of a global economic slowdown due to the fast-spreading coronavirus, with Singapore shares closing at their lowest in more than a year. Broader Asian markets tracked Wall Street lower as deaths from the virus rose outside of China, taking the worldwide toll to more than 3,200.
"What was initially seen as a China-centric shock is now certainly a global concern," said Westpac senior economist Elliot Clarke. The Asian Development Bank said the outbreak could cut global gross domestic product growth by 0.1% to 0.4% this year. Adding to worries, S&P Global Ratings flagged a slowdown in growth in the Asia-Pacific region to 4% in 2020, the lowest since the global financial crisis, with Singapore and Thailand among the worst-hit.
Financials across Southeast Asia were in the red, as further rate cuts seemed likely in a bid to shield economies from the impact of the outbreak. "We are just at the start of the rate-cut cycle and entering an uncharted territory. Banks, which are heavyweights in most countries, are likely to face the brunt of the cuts and drag down indexes," said Joel Ng, a Singapore-based analyst at KGI Securities.
The Singapore benchmark index closed down 1.9% to touch its lowest since October 2018 amid mounting fears of a recession, which led ING analysts to cut their forecast for annual economic growth to 0.3% from 1%. DBS Group Holdings, Southeast Asia's largest lender, shed more than 2% to hit its lowest level in more than a year.
Thai stocks slipped nearly 2%, with index heavyweight Siam Commercial Bank hitting its lowest since July 2010. The tourism-dependent economy's first-quarter economic performance will 'not be good' as the coronavirus outbreak hurts activity, a government official said on Friday. The Philippine benchmark slid 1.7%, while Indonesian equities closed 2.5% lower.
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