SINGAPORE - Singapore shares closed flat, weighed down by weaker sentiment over blue chip banks DBS Group and UOB after Keppel Corp affiliate KrisEnergy sounded a warning on its debt covenants.

The Straits Times index ended down 0.01 per cent or 0.19 points to 2,867.21, dragged down by DBS, which slipped 1.2 per cent or 18 cents to S$14.86. UOB fell 1.5 per cent or 27 cents to S$17.65.

KrisEnergy fell 2.4 per cent or 0.3 cents to 12.1 cents, after it posted a second quarter loss, and warned that some covenants on existing debt agreements could come under stress in the near term as weaker oil markets hit revenue.

The oil and gas producer has a S$200 million bond due in August 2018, in addition to a US$148.3 million secured revolving credit facility with DBS. It said that it had engaged "external parties" to help look for ways to strengthen its capital structure as it grapples with a protracted slump in oil prices.

Noble Group fell 3.4 per cent or 0.5 cents to 14.3 cents, with 92.4 million shares traded. Fitch Ratings noted that a liquidity crunch sustained by the commodity trader may be temporary, and that it will probably generate about S$900 million in the coming months including proceeds from a recent rights issue.

Bucking the overall weak sentiment, SingTel gained 1.4 per cent or six cents to S$4.31.