A local rally ran out yesterday after oil prices went flat and investors focused on fundamentals following lacklustre US economic data.
The Straits Times Index closed 0.1 per cent or 2.9 points lower at 2,893.65 although banks continued to hold the fort. DBS Group rose 0.8 per cent or 12 cents to $15.55, OCBC added 0.2 per cent or two cents to $8.84 while UOB advanced 0.2 per cent or three cents to $18.68.
HongKong Land also helped, gaining 1.5 per cent or 10 US cents to US$6.90. Profit-taking on ComfortDelgro and property counters CapitaLand and City Developments capped any chance of the STI ending higher. The transport operator shed 1.7 per cent or five cents to $2.89, CapitaLand slipped 1.2 per cent or four cents to $3.19 and CDL dipped 1.8 per cent or 17 cents to $9.06.
Signs of slowing growth in the US service sector following weaker-than-expected jobs data last week reinforced worries about the health of the economy.
"The rally isn't that convincing because the market was up on expectations of delays in rate hikes rather than good US economic data," said Mr Lee Yu Sheng, a dealer with Maybank Kim Eng. "The STI is not far from 2,960 resistance, so there is also some profit taking."
Oil prices were nearly flat, weighed down by a weaker US dollar and scepticism that major producers can reach a deal to freeze output. That took the wind out of local oil and gas counters Rex International, which closed flat at 5.4 cents, while Ezion dipped 1.9 per cent or 0.5 cent at 25.5 cents.
Pennies remained the most actively traded counters, with Noble Group flat at 14 cents with 332.7 million shares traded. Cedar Strategic surged 50 per cent or 0.1 cent to 0.3 cent, with 51.8 million shares traded. Spackman Entertainment was up 7.7 per cent or 0.7 cent to 9.8 cents on trade of 40.2 million shares, while QT Vascular jumped 12.3 per cent or 0.9 cent to 8.2 cents, with 50.3 million shares traded.
Vallianz surged 10.5 per cent or 0.2 cent to 2.1 cents on trade of 127.4 million after it proposed fund-raising to strengthen its balance sheet via a one-for-one rights issue at two cents a share.
Investors took heart that expected "net proceeds of $71.8m from the rights issue can be used to meet payment claims of US$63.5m (S$85.4 million) from Vallianz parent Swiber Holdings, which has granted a charge over its 25.2 per cent shareholding in Vallianz in favour of DBS", according to Maybank Kim Eng.
China Minzhong Food surged 18 per cent or 17.5 cents to $1.135 after a firm controlled by Indonesian tycoon Anthoni Salim offered to buy the rest of the S-chip in a deal valuing it at $786 million.
Marvellous Glory Holdings offered $1.20 in cash for each share in China Minzhong. Beauty products firm Best World fell 12.8 per cent or 24 cents to $1.635 on an adjustment for a one-for-four bonus issue.