SINGAPORE - The benchmark Straits Times Index (STI) plunged further to a new 12-month low on Monday (Sept 28), alongside key markets in the region that were also gripped by bearish sentiments.
STI opened to a poor start on Monday and soon tumbled to 2,792 by 2pm after losing 1.41 per cent. This followed the 1.61 per cent drop over the past week, and market watchers cautioned that worse may yet come.
The losses so far put the index officially in bear territory, defined as a 20 per cent or more fall from the recent peak, which was 3,531 in mid-April.
IG analyst Bernard Aw said: "In recent weeks, we have seen STI keep breaking its moving average; 2,800 was a key psychological level, and now we may see the index testing the next key level at 2,700, which would be the lowest since 2012."
Aside from concerns around Singapore's economic outlook after news that a technical recession is on the way, the sell-off on Monday was also due partly to downward movements in Shanghai.
The Shanghai Composite had lost around 0.3 per cent by 2pm, but it fell by as much as 1.07 per cent earlier on Monday.
"As China is close to its Golden Week holiday, it's typical for investors to close their position and avoid uncertainties. That will then affect the activities here," Mr Aw said.
Despite the fall here, STI stocks' price-to-earnings ratio is still around 12.6 times - not low enough for bargain hunting to make sense, Mr Aw cautioned.