SOUTHEAST Asian stock markets stumbled on Thursday, with Indonesia and Vietnam entering bear market territory, after the United States imposed a temporary ban on travel from Europe and world health officials declared the coronavirus a pandemic.
US President Donald Trump suspended all travel from Europe to the United States for 30 days starting on Friday as he responded to mounting pressure to take action against the spread of the virus.
The World Health Organisation described the virus as a pandemic for the first time on Wednesday, warning that Italy and Iran were now on the frontline of the disease and other countries would soon join them.
“At the crux of the issue is the fear of the prolonged, widespread coronavirus sustaining its hold on the market,” Jingyi Pan, market strategist at IG, said in a note.
“Even though we do have substantial support coming through from governments and central banks alike, the dispersion of the virus so far continues to mark the risks of dragging the global economy into recession.”
Central banks and governments world over are rolling out stimulus measures to contain the economic impact of the virus. The European Central Bank is expected to approve a stimulus package to support the eurozone economy when it meets later in the day.
However, investors are sceptical about the efficacy of these measures as the virus continues to extract a heavy human and economic toll.
In Southeast Asia, Indonesia and Vietnam entered bear market territory, joining the Philippines and Thailand.
Indonesian stocks fell as much as 4.4%, shedding more than 22% from its Jan. 15 peak, even after the government announced tax relief measures for manufacturing amid the outbreak.
Vietnam shares dived as much as 5.7%, falling more than 23% from its Jan 22 peak, with Vietjet Aviation JSC hitting its lowest since December 2017.
Tourism-dependent Thai equities tumbled over 9% in their worst session since October 2008, a day after the country suspended visas on arrival for visitors from 19 countries to limit the virus spread.
Philippine stocks slumped as much as 6.7% to their lowest since February 2014, as increasing case of the virus sent its senate into a lockdown.
Singapore stocks fell as much as 4.2% to their lowest in more than four years, as concerns of recession in the trade-reliant economy grew. – March 12, 2020, Reuters
