Singapore shares dropped sharply to a four-month low amid a regional selloff Friday as concerns over U.S. growth dovetailed with rising fears over the euro zone's political and economic troubles.
Ratings downgrades for Greece and Spanish banks by Fitch Ratings and Moody's Investors Service, respectively, soured sentiment in already-rattled markets, while weak U.S. Philadelphia Fed manufacturing data also weighed.
The 30-share Straits Times Index retreated 1.5%, or 43.51 points, to end at 2,779.10--the index's lowest close since Jan. 18--after slumping by as much as 2.1% earlier in the session. For the week, the index closed down 3.6%.
"Markets are expected to remain preoccupied with the state of the Greek and Spanish banking sectors while the prospect of a (Greek exit) continues to hang over investors' heads," OCBC said in a note, adding that particular attention would be given to any Greece-related rhetoric from the Group of Eight nations' weekend meeting. "With no clear positive catalyst on the horizon--given Greek elections will only happen next month, and that the earnings season is ending--I think the market could continue falling in low volumes" in the near term, said Kevin Scully, executive chairman at NRA Capital. He tips significant support for the STI first at 2,650, before 2,500.
Volume remained relatively thin at 1.61 billion shares, albeit up from the 1.2 billion shares traded Thursday. Decliners overwhelmed gainers 369 to 68.
Blue chips generally fell, with only one gainer on the benchmark index. Most commodity counters slipped, with Golden Agri-Resources dropping 4.5% to S$0.635 to become the biggest loser on the STI.
Wilmar International lost 2.8% to close at S$3.79--its lowest close in over three years--while Olam International fell 0.6% to S$1.73.
Developers too suffered, extending a poor recent run amid rising worries of further government intervention in the local property market. CapitaLand declined 3.5% to S$2.50, and City Developments dipped 2.9% to S$9.89.
Banks lost their luster, tracking their peers in China. United Overseas Bank dropped 3% to S$17.43, as DBS Group Holdings fell 2% to S$13.27. Oversea-Chinese Banking Corp. gave up 1.8% to end at S$8.42.
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