STI slumps 0.75% due to profit taking

THE local market was dragged down by fresh concerns over the eurozone today, as traders took the chance to book profit on their positions.

The Straits Times Index dipped 24.71 points or 0.75 per cent to 3,272.66 points. But even after the drop it is still up 3.3 per cent for the year.

The reason for the profit-taking was some political uncertainty in Europe - basically, allegations of secret payments of money made against Spain's Prime Minister and upcoming elections in Italy which could threaten its fiscal policies.

"Political instability in these large eurozone countries still has the ability to spook markets and indeed the euro softened after last week's strong rally," said a note by ABN AMRO.

Dr Adrian Foster, Rabobank's Asia-Pacific head of financial markets research, observed that there was a "clear risk-off tone" in the regional trading session, following the "smashing" of European equities on Monday.

The pain was felt across the STI's constituents, with 22 member stocks ending lower and only four counters up, with the remaining four unchanged.