Local shares slumped as oil prices slipped back below US$40 a barrel and the greenback firmed on the possibility of a United States interest rate hike as early as next month.
The Straits Times Index slipped 1.2 per cent, or 34.59 points, to 2,847.39 points, dragged down by the three banks and oil-related counters, including Keppel Corp and Sembcorp Industries.
OCBC sank 2.6 per cent, or 24 cents, to $8.91, DBS Group fell 1.48 per cent, or 23 cents, to $15.34 and UOB dropped 1.2 per cent, or 23 cents, to $18.65.
While the US Federal Reserve said last week it will likely raise rates only twice this year, instead of four times, officials now seem to be advocating a hike in April. "In the light of hawkish comments from several Fed officials, we expect the STI to now trade between 2,820 and 2,900," remisier Alvin Yong said.
Sliding oil prices were cause for concern, as was news of a far bigger-than-expected US crude stockpile. Keppel fell 2.8 per cent, or 17 cents, to $5.87 and Sembcorp sank 5.3 per cent, or 17 cents, to $3.06.
Smaller firms were hit as well. Ezra Holdings dipped 4.3 per cent, or 0.5 cent, to 11.1 cents on trade of 91.1 million shares, while Rex International slipped 1.9 per cent, or 0.2 cent, to 10.4 cents with 81.5 million shares traded.
Global Logistic Properties fell 3.5 per cent, or seven cents, to $1.91 with 26.4 million shares traded after it was queried on Wednesday by the Singapore Exchange for unusual price movements. The firm said it was unaware of any reason for this.
Property developer Sysma Holdings surged 29 per cent, or 2.7 cents, to 12 cents, with 70 million shares traded. The company was queried on Tuesday on unusual price and volume movements but said it could not explain the trading activity.
Parkson Retail Asia jumped 12.7 per cent, or two cents, to 17.7 cents, with 77.5 million shares traded. The department-store operator was queried yesterday but said it could not explain the unusual volume movement in its stock.
OKH Global, the most actively traded counter, continued to rebound, up 25 per cent, or 2.6 cents, to 13 cents, with 368 million shares traded. It plunged nearly 80 per cent on Monday, triggered by the forced sale of millions of shares pledged to private banks.
Meanwhile, OCBC Investment Research has a hold call on SMRT, which gained 1.6 per cent, or 2.5 cents, to $1.57. The train operator acknowledged a safety lapse that led to the deaths of two employees at Pasir Ris MRT station on Tuesday.
"This is the first time in history that a fatality involving SMRT staff happened on the North-South and East-West Line. Recall that SMRT was fined $1.3 million on July 14 for two safety breaches. However, as the lapse in safety procedure resulted in the deaths of two staff, we believe LTA (the Land Transport Authority) will take much more severe action against SMRT," OCBC said.