The bears ruled yesterday after a volatile trading session that saw Singapore shares zig-zagging between positive and negative territory.
The dour lead from Wall Street, a weak opening in Europe, and United States rate-hike concerns more than offset any enthusiasm over the Chinese central bank's surprise interest rate cut on Tuesday.
The Straits Times Index (STI) slipped 13.29 points or 0.46 per cent to 2,873 after sinking as much as 1.3 per cent during the day.
"The panic has subsided after such a big global sell-down on Monday. But the rebound on the STI earlier yesterday did not have legs because the Chinese rate cut is seen as a band-aid solution, and some are still pricing in a September rate hike," said remisier Alvin Yong.
China cut interest rates for the fifth time since last November and lowered the amount of cash banks must set aside, but the markets have not been too impressed.
"In other economies, you would expect either boosting the amount of credit available and making that credit cheaper might lift investment growth. But so far, these cuts have not done very much," said DBS Bank chief investment officer Lim Say Boon. "The problem in China is that investment had been dominated by the state and state-owned companies."
Meanwhile, traders are watching an economic summit this week at Jackson Hole, Wyoming, for clues on the timing of the US rate hike .
Market laggards yesterday included DBS, which fell 1.4 per cent or 25 cents to $17.65; Singtel, down 1.3 per cent or five cents to $3.85; and Keppel Corp, which shed 3 per cent or 21 cents to $6.78.
"We are still in a downtrend despite technical rebounds on Tuesday, and there is value emerging in blue chips," Mr Yong said.
Remisier Desmond Leong said he is seeing more clients selling their holdings during rebound periods, rather than bargain hunting.
"I don't think we are at the bottom yet, especially if the US market continues to be weak. But there are definitely buyers waiting on the sidelines," he added.
Penny plays continue to be among the most actively traded counters.
Software solutions provider Silverlake Axis, which resumed trading yesterday after a halt was lifted, plunged nearly 28 per cent or 17.5 cents to 46 cents, with 80.7 million shares traded.
The company became a target of short-sellers after an anonymous report took issue with certain transactions between the group and private companies in which Silverlake founder and chairman Goh Peng Ooi is said to own stakes.
New Silkroutes plunged 50 per cent or 0.1 cent to 0.1 cent, with 672.5 million shares traded. The company announced on Tuesday that it plans to do a 500-into-1 share consolidation to meet the Singapore Exchange's minimum trading price rule.