A drop in oil prices and a weaker Wall Street pushed local stocks into negative territory yesterday.
The Straits Times Index fell 0.32 per cent or 9.15 points to 2,889.15, weighed down by blue chips ComfortDelGro, ST Engineering, Global Logistic Properties, Wilmar International and Singtel.
ComfortDelGro sank 3.5 per cent or nine cents to $2.46, ST Engineering lost 1.2 per cent or four cents to $3.22, Singtel shed 0.8 per cent or three cents to $3.65 while Semb- corp Industries lost 1.1 per cent or 1.5 cents to $1.39.
Global Logistic Properties shed 0.9 per cent or two cents to $2.21 despite a buy call from OCBC Investment Research. The broker said the fund management business provides GLP with a "recurring fee income stream, in addition to its share of development and rental income".
"Some 67 per cent of GLP's assets today are managed in funds and this is expected to increase," OCBC said.
Trading remained thin in the last-but-one trading day of 2016 with a paltry turnover of $564.9 million.
While market sentiment seems to have improved, with expectation of more US fiscal stimulus buoying interest in equities, some brokerages are staying out of local equities until they see stronger signals of an improvement in corporate earnings.
"We expect banks to report low-to-mid single-digit earnings growth, while the oil and gas sector is still saddled with refinancing issues as well as a lack of orders and earnings," OCBC said.
DBS Group dipped 0.5 per cent or nine cents to $17.38, OCBC shed 0.2 per cent or two cents to $9.01.
But while the outlook for several key sectors is soft, lacklustre share prices have already more than discounted the weak and cautious outlook. So, shares should find good support at current levels, barring no drastic decline in the global economic outlook, OCBC said.
Meanwhile, oil and agri-commodity counters retreated after West Texas Intermediate (WTI) crude fell to US$53.87 per barrel yesterday from US$54.06 on Wednesday, following an industry report that showed a surprise increase in the country's crude inventory.
Wilmar International lost 0.8 per cent or three cents to $3.61, while Ezion Holdings shed 2.5 per cent or one cent to 38.5 cents on trade of 26.2 million. Ezra Holdings dipped 2 per cent or 0.1 cent to 4.9 cents, with 24 million shares changing hands, while Rex International fell 1.4 per cent or 0.1 cent to 6.9 cents.
Pennies were again the most actively traded in a thin-volume market. AA Group skyrocketed 35.7 per cent or 0.5 cent to 1.9 cents, with 55.3 million shares changing hands, while Spackman Entertainment edged down 0.5 per cent or 0.1 cent to 19.1 cents on trade of 43.3 million shares.
For a second straight session, Equation jumped 10 per cent or 0.1 cent to 1.1 cents, with 37.1 million shares traded.