Market experts said the benchmark Straits Times Index (STI) has enjoyed a nice bull run since the start of the year, and appears a tad exhausted.
However, most do not expect any potential pullback to be more than 3 per cent, given the positive earnings report cards by blue-chip companies so far and the overall economic health of Singapore and the rest of the world.
The global economy is undergoing a phase of rare, broad and synchronised growth, with indications that growth could indeed strengthen further in the first half of this year, said DBS economists.
They noted that the United States is on track to report a third consecutive quarter of 3 per cent real gross domestic product growth and China continues to display surprising resiliency, despite some measures aimed at slowing activities.
Yesterday, the STI ended at 3,567.14, down 5.48 points, or 0.15 per cent. More than 1.6 billion shares, worth $1.2 billion, were traded. There were 224 gainers to 217 losers.
Ms Margaret Yang, market analyst at CMC Markets Singapore, sees 3,600 as the immediate resistance for the STI. Support is pegged at 3,500. "This 3,600 is also a psychological resistance. Whenever the market moves up 100 points, it faces selling pressure as investors look to take profit," Ms Yang said.
Local banks, the main beneficiaries to momentum trades on rising rates, took a breather from recent rallies. DBS, the largest bank by market value, hit $26.73 a share, before ending at $26.58, down 19 Singapore cents, or 0.71 per cent.
Profit-taking also sent United Overseas Bank and OCBC lower, at $27.88 and $13.04, respectively.
Diversified marine conglomerate Keppel Corp - seen as a barometer to the oil and gas sector here - got a thumbs up from analysts who deemed the worst is over for the group.
DBS analyst Ho Pei Hwa reiterated her buy call on Keppel, with a target price of $10.20 a share.
"Keppel is a safer bet to ride on property re-rating and oil and gas recovery. Keppel's decent dividend yield of 3 per cent (based on 40 per cent payout ratio) also lends support to its share price," Ms Ho said.
Keppel, which opened at $8.52 a share, ended at $8.63, up 5 Singapore cents.
Troubled commodities group Noble, whose shares were trading around 30.5 cents each before trading was halted on Thursday, resumed trading lower yesterday. Shares hit 26.5 cents, before ending at 26 cents, down 4.5 cents, or 15 per cent.