SINGAPORE - The 2018 World Cup may be the stuff of dreams for football fans, but it will be less so for the stock market as die-hard fans stay glued to their TV screens.

According to a DBS Group Research report, the Straits Times Index (STI) fell by an average of 8.6 per cent in the two months between end-April and end-June during the past six World Cup tournaments. The last time the World Cup was held in 2014, SGX's trading value dropped by 29 per cent in the two weeks after the soccer tournament began.

DBS economists Taimur Baig and economist Ma Tieying wrote: "STI's decline in May this year is thus in line with our expectation that the two-month period from May-June should be net negative with subdued trading activity. We expect trading activity to quieten further this month as the World Cup tournament starts, and amid June school holidays, attention gets diverted away from the stock market."

The silver lining is that after the tumble in May, there is seen to be "rather limited" downside for the STI.

They added: "Our 2018 year-end target of 3,850 for the STI represents 11 per cent upside. We remain optimistic that the market should trend higher in the second half of the year. Its strong external position should stand out among the neighbouring countries as rising rates and a strong US dollar are likely to continue to put markets on the defensive."