Local equities bucked a regional rally yesterday as traders locked in profits from Monday's gains. The benchmark Straits Times Index (STI) slid 16.02 points, or 0.49 per cent, to 3,246.08. Turnover was limp, with just 967.3 million shares worth $864.4 million traded.
KGI Securities (Singapore) trading strategist Nicholas Teo noted that the pullback in local shares did not come as a surprise, given that Singapore was one of the key markets traders played with on Monday simply because most other major bourses were shut.
News over the weekend that the People's Bank of China has cut its reserve ratio requirements for banks offering loans to small businesses also likely provided fuel for traders to move into the Hong Kong market, which resumed trading after a holiday, said Mr Teo.
Hong Kong was the biggest winner in Asia, jumping 2.25 per cent as it played catch-up, while Tokyo advanced 1.05 per cent and Jakarta rose 0.43 per cent. Shanghai and Seoul remained closed for the holidays.
"The Singapore market has had a very good year so far. But investors should be taking a cautious stance going into the end of the year - there could be some re-balancing as people lock in profits," Mr Teo told The Straits Times. "And there is the upcoming earnings season to look out for, as well as the implications of the reversal of quantitative easing in the United States."
The three local banks were a big drag on the STI: United Overseas Bank dropped 1 per cent or 24 cents to $23.76 and OCBC Bank fell 0.7 per cent or eight cents to $11.18. DBS Group Holdings shed 0.5 per cent or 10 cents to $21.14.
Meanwhile, a slide in oil prices on renewed fears about the oversupply situation weighed on oil and gas-related plays. Keppel Corporation lost 0.9 per cent or six cents to $6.52, while Sembcorp Industries fell 0.7 per cent or two cents to $2.97. Other laggards included Hutchison Port Holdings Trust, which sank 2.2 per cent or one US cent to 43.5 US cents, and ComfortDelGro, down 1.9 per cent or four cents to $2.04.
Elsewhere, HG Metal Manufacturing climbed 0.9 per cent or half a cent to 57.5 cents. The firm has called for an extraordinary general meeting on Oct 25 to seek shareholder approval for an asset sale and capital-reduction exercise.
The day's most heavily traded stock was Addvalue Technologies, which requested a trading halt pending an announcement, after it received a query from the Singapore Exchange. The stock was last seen at 4.5 cents, 4.7 per cent or 0.2 cent up on the previous day's close, with 135.5 million shares traded.
Local shares aside, the strong regional showing was in line with major stock indices on Wall Street, which pushed to record highs at the start of a new quarter, thanks to robust manufacturing data. The Dow Jones Industrial Average rose 0.68 per cent overnight.