Asian markets plunge on growing US recession fears

STI sinks 4.1%, while Japan’s Nikkei 225 slumps 12.4% in worst day since 1987 crash

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TOKYO A global stocks sell-off deepened in Asia on Aug 5 as fears that the US could be heading for recession sent investors rushing from risk assets while wagering that interest rates will have to fall rapidly to rescue growth.

In Singapore, the Straits Times Index (STI) closed down 4.1 per cent, after sliding as much as 4.9 per cent earlier in the day.

The last time the market was more hammered was on March 23, 2020, during the outset of the Covid-19 pandemic when the STI plunged 7.4 per cent.

The index's biggest drop occurred on Oct 24, 2008, in the midst of the global financial crisis when shares dived 8.3 per cent.

Local banks led the losses in value terms on Aug 5, with DBS ending 5.8 per cent lower at $33.27, while UOB lost 5.5 per cent to $30.08, and OCBC Bank fell 5.3 per cent to $14.02.

Japan's Nikkei 225 Stock Average plunged 12.4 per cent as investor confidence crumbled on a surge in the yen, tighter monetary policy and broader concern about the US economy.

It was the worst day for the Nikkei since the Black Monday crash of 1987. Its loss of 4,451.28 points was also the largest in its history.

Japan also entered a bear market, as the Nikkei was down more than 20 per cent from its most recent high.