Asian shares tumbled Tuesday after a meltdown in Chinese stocks sparked a global equities rout and fuelled mounting fears over the outlook for the world economy.
Here in Singapore, stocks fell 4.3% yesterday and today opened 1% down.
“The benchmark Straits Times Index fell 127.62 points to end at its day-low of 2,843.39, its lowest level in three years,” Channel NewsAsia reported yesterday, noting that it was STI’s biggest one-day drop since 2008.
The top losers, according to the report, wereGlobal Logistic at 4.65 per cent and Singtel at 4.06 per cent. Among banks, OCBC shed 4.4 per cent, and DBS and UOB fell 3.5 per cent and 2.93 per cent respectively.
The Singapore dollar also hit its lowest in five years yesterday at $1.413 to the USD.
“The world’s capital markets are in meltdown, and investors are asking what can stop the panic,” said IG Markets’ chief market strategist Chris Weston. “Despite the outrageous moves in the European and US futures markets overnight, it is Asia that is at the epicentre of this concern.”
Global equities took a battering overnight, with US and European markets plunging after an almost 8.50 percent slump in Shanghai — the heaviest daily loss since 2007 — sparked panic among world investors.
World equity markets have seen some US$5 trillion wiped off their value since China’s surprise devaluation of the yuan on August 11 added to fears the world’s second-largest economy is weaker than thought.
Chinese shares have been extremely volatile since a huge debt-fuelled rally, which saw the market rise 150 percent in 12 months, collapsed in mid-June prompting Beijing to unleash unprecedented measures to support the equity market.
Dealers were braced for more heavy falls Tuesday, as they await news of more intervention from Beijing to rescue its free-falling markets.
It looks likely “that we will carry on the recent trend and if we do, it will be a rough day,” James Lee, managing director of First NZ Capital, told Bloomberg News. With a report from AFP
Photo: BBC News
