[SINGAPORE] Singapore shares tumbled in early trade on Tuesday (Mar 11) morning, joining Asia-wide declines as US markets dropped deep into negative territory on fears over tariffs and recession risks.
At around 1.02 pm, the Straits Times Index (STI) was down by 2 per cent at 3,822.55. Across the broader market, losers outnumbered gainers 354 to 148 after around one billion securities worth S$1.2 billion changed hands.
As at 12.55 pm, local banking stocks were all down. DBS was down 2.9 per cent or S$1.31 at S$44.54 with 6.3 million shares transacted. UOB fell 3.1 per cent or S$1.21 to S$37.46 with 3.4 million shares traded and OCBC dropped 1.9 per cent or S$0.32 to S$16.73 as 6.8 million shares swapped hands.
Other major stocks had declined at open. As at 9.01am, offshore and marine specialist Seatrium dropped 2.4 per cent or S$0.05 to S$2.08, as 2.5 million shares changed hands. ST Engineering slipped 0.7 per cent or S$0.04 to S$6.02 as at 9.33 am, with 2.7 million shares transacted. Sembcorp lost 3.4 per cent or S$0.21, falling to S$6.01 as at 9.34 am, as 1.6 million shares changed hands.
In other parts of Asia, Japan’s Nikkei 225 tumbled more than 2 per cent in early trade, while Australia’s S&P/ASX index was down 1.4 per cent. South Korea’s Kospi dropped nearly 1.8 per cent.
The tech-focused Nasdaq suffered its biggest one-day loss since 2022, declining 4 per cent overnight to 17,468.32. The S&P 500 dropped 2.7 per cent, closing at 5,614.56 and the Dow Jones Industrial Average fell 2.1 per cent to 41,911.71.
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The declines are an extension of losses that have been ongoing for the past few weeks, with the S&P 500 down over 8 per cent from its Feb 19 high and the Nasdaq at a more than 10 per cent decline from its December high.
Likewise, European shares sank to their lowest in nearly one month, dragged down by losses of tech shares which investors dumped amid uncertainty around US tariffs. The pan-European Stoxx 600 Index dropped 1.3 per cent to 546.20.
Investors are fearing the impact of tariffs on the US’ major trading partners, such as China, Canada and Mexico. US President Donald Trump has said the US economy is facing “a period of transition”, as he avoided addressing the possibility of a recession this year, Bloomberg said.
“The sharp sell-off in equities … continued as concerns over US tariff policy and government job cuts continued to weigh,” said ANZ Research.
“No let-up in uncertainty seems likely in the near term given reciprocal and other tariffs will be announced in April with more to follow in May,” it added.
Michael Wan, senior currency analyst at MUFG, said Trump’s tariffs will dampen investments into Asia.
“For Asia specifically, while tariff and trade policy uncertainty has already had an impact on US growth indicators, this will over time also feed through to our region through slowing investments into manufacturing factories and also weaker exports as US consumers adjust to a potential new reality of higher prices and lower supply,” he said.
“Our North Star is that Trump 2.0’s tariffs will be larger and more pervasive beyond the day-to-day whiplash,” he added.
Wan noted Asian currency weakness in the near-term, citing that markets have been underpricing the downside risks of Trump’s tariffs and policy to Asia’s growth.
BlackRock analysts remain overweight on US stocks and think a recession is unlikely though job creation has slowed.
“The labour market remains strong in contrast to soft survey data showing declining consumer confidence. US corporate earnings are also holding up … US payrolls data showing slower but still solid job gains suggests market concerns about a recession are overdone, in our view,” they said.
However, heightened policy uncertainty could fuel near-term market volatility, they added.
Tim Murray, a capital markets specialist at T Rowe Price, noted a growing skepticism about the US earnings outlook compared to an “incrementally more positive environment for non-US stocks, particularly in Europe”.
Murray said: “US stocks typically have featured higher valuations but also stronger earnings fundamentals than non‑US stocks since the 2008–2009 global financial crisis. While US relative valuations remain high, future earnings may not support that premium”.
“The bottom line is that with US stocks facing scepticism over the near term, there may be more attractive opportunities elsewhere – particularly in regions offering more attractive valuations combined with an improving macro outlook,” he said.
