Singapore shares lost ground as oil retreated and investors got spooked after the European Central Bank dashed hopes of extending its asset-buying programme.
With the local market closed for the Hari Raya Haji holiday on Monday, traders trimmed their positions ahead of the long weekend.
Profit-taking sent the Straits Times Index (STI) down 0.73 per cent or 21.15 points to 2,873.33, but up 2.5 per cent for the week. Singtel led the index lower, shedding 1.5 per cent or six cents to $4, as Singapore Press Holdings dipped 1.8 per cent or seven cents to $3.79.
Banks also weighed on the STI. DBS Group Holdings fell 0.7 per cent or 11 cents to $15.44 and OCBC lost 0.7 per cent or six cents to $8.81. United Overseas Bank (UOB) slid 0.3 per cent or five cents to $18.73.
Maybank Kim Eng said UOB is its "preferred exposure to the Singapore banking sector" as it has the "smallest trading book, highest provisioning coverage, biggest Singapore exposure, and smallest China exposure. As long as mortgages and property loans are not under threat, systemic risks should be low and manageable".
But on another front, the broker noted the "shakeout in offshore marine has barely started and industry rebalancing is not yet in sight... The pain could get worse before getting better, especially as provision coverage has fallen".
A pullback in oil prices sent Keppel Corp down 1.3 per cent or seven cents to $5.42. Oil prices retreated on concerns that a recent, surprisingly large, drawdown in United States crude inventories may have been due to temporary production disruptions caused by the US hurricane season.
Among the most active was Ezra Holdings, which got hit with a query from the Singapore Exchange over unusual volume movements. The oil and gas play fell 5.2 per cent or 0.3 cent to 5.5 cents on 291.9 million shares traded.
Calling the latest run-up in oil and gas counters a dead cat bounce, or a temporary but unsustainable rally, a dealer warned that despite recent firmer oil prices, there has been "no change in fundamentals and the ongoing scrutiny of balance sheets of some of the distressed companies".
Still, several oil and gas counters continued to track gains. Rex International rose 1.6 per cent or 0.1 cent to 6.3 cents, with 51.8 million shares traded; Ezion Holdings was up 1.8 per cent or 0.5 cent to 29 cents; AusGroup gained 2.1 per cent or 0.1 cent to 4.9 cents. Vallianz jumped 4.8 per cent or 0.1 cent to 2.2 cents, while Loyz Energy climbed 5.6 per cent or 0.1 cent to 1.9 cents.
Other actively traded counters included Noble Group, which rose 1.4 per cent or 0.2 cent to 14.3 cents, with 147.5 million shares traded. Magnus Energy was flat at 0.1 cent, with 63 million shares traded. Addvalue Technologies extended gains for a second session, jumping 8.3 per cent or 0.3 cent to 3.9 cents, with 63.8 million shares changing hands.