Asia: Stocks take further hit amid more lockdowns to fight Covid-19; STI down 7.4%

ASIAN shares slumped on Monday as more governments turned to lockdowns to combat the spread of Covid-19, which has killed more than 14,000 people globally. There are now over 330,000 confirmed cases of the disease.

The battered sentiment also comes amid an environment where recent stimulus measures by policymakers are having little effect as global recessionary fears continue to rise.

"The extraordinary monetary and fiscal stimulus may help cushion a severe global economic downturn eventually. Still, the incentives are doing little to bolster investor sentiment, as confirmed by an exceptionally weak open for Asia-Pacific's equity markets," said AxiCorp global chief markets strategist Stephen Innes.

Investors continued to liquidate their assets as the rise of Covid-19 cases worldwide has contributed to tightened liquidity conditions, with the flight to cash, particularly the US Dollar.

"The stock market turmoil is increasingly becoming a liquidity crisis as the spillover effect of massive unwinding of leveraged positions starts to erode other markets, triggering a broader sell-off in global equities, bonds and even forex positions," CMC Markets' market analyst Margaret Yang said.

She added: "This might worsen the credit profile for corporates and dampen investment sentiment as individuals become less wealthy."

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Following Friday's relief rebound, most key benchmarks in Asia opened in a sea of red on Monday.

Singapore's Straits Times Index (STI) opened 5.7 per cent lower, its largest fall at the opening bell since October 2008. The STI continued to see sell-offs in the early session, trading down 177.23 points or 7.4 per cent to 2,233.51 as at 11.08am.

In North Asia, Hong Kong's Hang Seng Index tumbled 959.74 points or 4.2 per cent to 21,845.33, and mainland China's Shanghai Composite Index lost 68.27 points or 2.5 per cent to 2,677.35.

South Korea's Kospi was down 74.16 points or 4.7 per cent to 1,491.99.

Bucking the trend in the region was Japan's Nikkei 225, which was helped by a cheaper Japanese Yen and possible stimulus measures by the Bank of Japan. It was trading 125.15 points or 0.8 per cent higher at 16,677.98.

In South-east Asia, Indonesia's Jakarta Composite Index shed 177.59 points or 4.2 per cent to 4,017.35, and Malaysia's Kuala Lumpur Composite Index was trading 34.37 points or 2.6 per cent lower at 1,268.91.

Elsewhere in the Asia-Pacific, Australia's commodity-heavy S&P/ASX 200 Index shed 345.50 points or 7.2 per cent to trade at 4,471.10.