JITTERS over a possible Greek exit from the euro zone and uncertainty ahead of a United States Federal Reserve meeting hammered bourses across Asia for a second day, sending local shares below the 3,300-point support yesterday.
The benchmark Straits Times Index (STI) sank 0.9 per cent to an intra-day low of 3,292.67, before closing at 3,298.09, or 25.04 points lower, with 1.08 billion shares worth $824.3 million traded.
"There may be concerns that Singapore would be significantly affected via the trade channel if a Grexit contagion spreads throughout Europe and the US financial system," said IG market strategist Bernard Aw.
"The index swiftly made a run below the strong 3,300 support early on and made quick work of short covering interests."
Noble Group was again the most actively traded stock, after stepping up its share re-purchase for a third time on Monday, adding 13 million shares to the 50 million bought since last Thursday.
"We continue to see the possibility of a dead cat bounce in Noble's shares, as underlying fundamentals remain unchanged," Mr Aw said. A dead cat bounce is a short-lived recovery in the price of a declining stock.
Noble shares jumped to a high of 74 cents before closing flat at 72 cents, with nearly 65 million shares traded. It had closed at 68.5 cents last Friday.
Speculative plays continued to be among the most actively traded stocks in a depressed market, with Debao Property gaining 2.3 per cent or 0.2 cent to 8.9 cents, with 40.3 million shares traded. LionGold jumped 5 per cent or 0.1 cent to 2.1 cents, with 26.9 million shares traded.
Market participants say the STI's next technical support level is at 3,280, with more volatility expected ahead of the resolution of the Greek debt crisis and outcome of the Fed meeting this week. "Until the Grexit issue clears up, or gets postponed yet again, any further upside is not sustainable," a remisier said.
"But if US Fed chair Janet Yellen comes out with unexpectedly dovish statements, that could help the market. Although, no one is really expecting that."
The Jardine group of companies and banking counters are weighing down the local bourse.
Jardine Matheson slipped 3.7 per cent or US$2.10 to US$55. Jardine Strategic fell 3.7 per cent or US$1.17 to US$30.36. Jardine Cycle & Carriage slid 0.3 per cent or 12 cents to $36.03.
DBS Group Holdings shed 1 per cent or 21 cents to $20.54. OCBC Bank dipped 0.4 per cent or four cents to $9.99. United Overseas Bank fell 0.5 per cent or 12 cents to $22.80.
Concerns over the Middle East respiratory syndrome sent shares of Singapore Airlines slipping 1.6 per cent or 17 cents to $10.42.