SINGAPORE - The bears ruled on Wednesday after a volatile trading session that saw Singapore shares zig-zagging between positive and negative territory.
The dour lead from Wall Street, a weak opening in Europe, and United States rate hike concerns more than offset any enthusiasm over the Chinese central bank's surprise interest rate cut on Tuesday.
The benchmark Straits Times Index closed down 13.29 points or 0.43 per cent to 2,873 after sinking as much as 1.3 per cent during the day.
"The panic has subsided after such a big global selldown on Monday. But the rebound on the STI earlier didn't have legs because the Chinese rate cut is seen as a band-aid solution, and some are still pricing in a September rate hike," said remisier Alvin Yong.
China cut interest rates for the fifth time since November and lowered the amount of cash banks must set aside but markets haven't been too impressed by the moves announced on Tuesday.
"In other economies, you would expect either boosting the amount of credit available and that making that credit cheaper might lift investment growth. But so far, these cuts have not done very much," Mr Lim Say Boon, chief investment officer, DBS Bank, said. "The problem in China is investment had been dominated by the state and state-owned companies."
Meanwhile, traders are watching for clues on the timing of the US rate hike at an economic summit at Jackson Hole, Wyoming this week for policymakers and central bankers.
Wednesday's market laggards included DBS, which fell 1.4 per cent or 25 cents to S$17.65, Singtel, down 1.3 per cent or five cents to S$3.85, Keppel Corp, which shed 3 per cent or 21 cents to S$6.78, and Jardine Matheson, off 1.9 per cent or 89 cents to S$46.51.
"We are still in a downtrend despite technical rebounds on Tuesday, and there is value emerging in blue chips," Mr Yong said.
Remisier Desmond Leong said he is seeing more clients selling their holdings during rebound periods rather than bargain hunting.
"I don't think we're at the bottom yet, especially if the US market continues to be weak. But there are definitely buyers waiting on the sideline," he added.