April 8, 2025
SINGAPORE – Asian markets extended a global stock rout on April 7 as US President Donald Trump refused to roll back global tariffs that could push the world into a recession.
Singapore’s Straits Times Index (STI) plunged 8.57 per cent, or 328.2 points, to 3,497.66 when trading opened.
After trying to claw back losses, the STI closed down 7.5 per cent, or 285.36 points, its biggest one-day loss since the 2008 global financial crisis.
Across the whole market, 612 stocks fell while 137 rose. Trading volume was very heavy, with $4.2 billion worth of shares changing hands, nearly three times February’s daily average.
“The STI has experienced sharp single-day declines in past periods of global uncertainty, including a 7.4 per cent drop in March 2020 during the Covid-19 pandemic and an 8.3 per cent fall in October 2008 during the global financial crisis,” said Mr David Gerald, founder, president and chief executive of Securities Investors Association (Singapore), or Sias.
“According to experts, if tariffs are sustained, they could contribute to higher inflation and slower global growth, which may in turn trigger further volatility and potential sell-offs in markets globally, including Singapore,” he added.
Mr S. Nallakaruppan, president of the Society of Remisiers (Singapore), said that although the sell-off on the STI is steep, there is less panic this time compared with previous episodes such as the Covid-19 pandemic in March 2020 and the global financial crisis in 2008.
Investors have seen the market plunge and rebound many times, and are “more savvy” now, he said, adding that the panic-selling in the morning might have more to do with algorithmic trading.
Bank stocks were among the biggest losers in key equity benchmarks across Asia on expectations that sharper rate cuts by central banks, including the US Federal Reserve, in response to a recession would weigh on banks’ earnings.
Shares of DBS Bank closed down 9.3 per cent to $39.28, after plunging 15.5 per cent to $36.57 when trading opened.
UOB fell 6.3 per cent to $33.23 and OCBC Bank lost 6.9 per cent to $15.47.
Hong Kong-listed shares of HSBC tumbled 14.8 per cent, while Standard Chartered Bank sank 17.5 per cent.
The biggest loser in Asia on April 7 was Hong Kong’s Hang Seng Index, which closed down 13.2 per cent, its worst drop since the 1997 Asian financial crisis.
China, which responded with like-for-like tariffs on April 4, saw its Shanghai index drop 7.8 per cent, the biggest one-day fall since February 2020 during the pandemic.
Japan slid into a bear market, with the Nikkei index down 7.8 per cent, a loss of 23 per cent from its peak in December.
Taiwan stocks suffered their biggest one-day fall on record with the Taiex closing down 9.7 per cent, while South Korea’s Kospi index tumbled 5.6 per cent.
In Europe, Germany’s Dax index dived 10 per cent after opening and was down 6.2 per cent.
France’s CAC sank 6.2 per cent, while Britain’s FTSE was down 4.6 per cent.
Mr Trump said on April 7 that he will impose an additional 50 per cent tariff on China if Beijing does not withdraw its retaliatory tariffs on the US. He also threatened to terminate talks.
On the evening of April 6 aboard Air Force One as he returned to Washington from a weekend of golf in Florida, Mr Trump brushed off the market turmoil, saying “sometimes you have to take medicine to fix something”.
As he spoke, US stock futures sank, pointing to a continuation of a brutal two-day sell-off that has already wiped US$6.5 trillion (S$8.8 trillion) from US markets.
Dow Jones Industrial Average futures fell 1,531 points, or 4 per cent, pointing to another brutal session ahead. S&P 500 futures shed 4 per cent, while Nasdaq futures lost 4 per cent.
US Commerce Secretary Howard Lutnick told CBS News on April 6 that the tariffs would not be postponed. “The tariffs are coming… They are definitely going to stay in place for days and weeks.”
JPMorgan Chase & Co chief economist Bruce Kasman on April 5 said he sees a 60 per cent chance that US tariffs will push the global economy into a recession in 2025. His note bore the title “There will be blood”.
Goldman Sachs on April 6 raised the odds of a US recession in the next 12 months to 45 per cent from a previous estimate of 35 per cent.
Mr Chetan Seth, an analyst at Japanese investment bank Nomura, said he is recommending investors take defensive positioning on Asia stocks outside of Japan, unless the US policy course reverses.
“Our sense is that the fundamental impact of tariffs and US slowdown is yet to come as tariffs weigh on US hard data such as inflation, labour market, consumption and corporate earnings over the next few weeks and months,” he said.
The Singapore dollar fell 0.2 per cent to 1.3488 per US dollar. However, the currency is still 0.8 per cent higher to the greenback on a year-to-date basis.
The currencies of nations slapped with much higher tariffs fared worse. The Malaysian ringgit fell 0.7 per cent, while the South Korean won was down 0.6 per cent.
Mr Taimur Baig, chief economist at DBS, said that with the balance of risks to Singapore’s growth and inflation outlook skewed to the downside, he expects the Monetary Authority of Singapore to further slow the pace of the Singapore dollar’s trade-weighted appreciation at its next policy meeting on April 14.
A weaker currency may help Singapore exports by mitigating some of the price impact from the new tariff. Other central banks in Asia may also ease by cutting their interest rates to support economic growth.
Mr Baig added: “We estimate direct negative growth impact of 0.5 to 0.75 percentage points to our Singapore 2025 GDP (gross domestic product) growth forecast of 2.8 per cent.”
He warned that if the US goes on to impose separate tariffs on semiconductor and pharmaceutical imports, which could be as high as 25 per cent, Singapore’s economy will sustain a much bigger hit than the current estimate.
US crude fell below US$60 a barrel for the first time since April 2021 on worries of a global recession.
Brent crude fell US$2.05 to US$63.53 a barrel, while US crude dived US$2.07 to US$59.92 per barrel. Mr Trump’s sweeping tariffs will push up costs for businesses, which in turn would hurt demand for oil.
Even gold was swept up in the sell-off, dropping 0.7 per cent to US$3,013 an ounce. Dealers wondered if investors were taking profits where they could to cover losses and margin calls on other assets, in what could turn into a self-feeding fire sale.
Mr Nallakaruppan of the Society of Remisiers said the Singapore market will remain volatile, and he cannot tell where the bottom is yet.
But he added that Singapore stocks are also mainly “fundamentally driven”, and so long as investors have holding power, they can stay invested in stocks with good dividend yield, a low price-to-earnings ratio and good price-to-book ratio.
They can also consider government-linked real estate investment trusts with strong balance sheets.
Mr David Kuo, co-founder of investment education website The Smart Investor, said: “In times of recession, look for companies that produce things that people can easily afford or can’t easily do without. Look at consumer staples, banks, supermarkets.”
Analysts expect the Singapore Government to offer financial support to households and businesses if needed.
Mr Chua Hak Bin, co-head of macro research at Maybank, said: “The Government has ample dry powder to introduce more fiscal stimulus in the event of a sharp global downturn.”
He said the accumulated fiscal surplus over the current electoral term amounts to a sizeable $14.3 billion, which can be tapped over the 2025 financial year without needing to draw from past reserves.