PROFIT-taking sent Asian bourses into a retreat on Monday, after they conquered fresh intra-day record high levels, following Wall Street's spectacular gains last Friday.

But dealers believe that the underlying bullish market sentiment remains very much intact, as the risk appetite has returned in a strong way this week.

The stronger-than-expected job data in the United States has boosted hopes that the world's biggest economy may enjoy a soft landing, despite being saddled by a mortgage crisis which had soured investors' sentiment last month.

In Singapore, the benchmark Straits Times Index was down 2.31 points at 3,820.31, after gaining 61.05 points in the morning to hit an all-time high of 3,883.34.

Overall market volume was at a heavy 4.6 billion shares worth $2.88 billion. On the scoreboard, there were 406 gainers and 488 losers.

Elsewhere, Hong Kong's Hang Seng Index closed 0.22 per cent lower, after rising 2.3 per cent to hit a record high of 28,482.4.

But China's Shanghai Composite Index rose 2.5 per cent to a record high of 5692.750.64 on re-opening after a Golden Week holiday to celebrate China's National Day.

One dealer said that the big swings in the STI and the Hang Seng were a reflection of 'looking at the glass half-full and half-empty'.

The upward revision in the US job data means that the prospects of a recession in the United States, Asia's largest exports market, have lessened considerably and this has triggered a bull-run in Asian markets in the morning.

But such a 'soft landing' will also lower the probability of the US Federal Reserve cutting interest rates further, and this prompted wide-spread profit-taking among funds in the afternoon.

In Singapore, the top gainer was Singapore Exchange which was up $1.00 at a record close of $16.40 on a heavy volume of 12.7 million.

This followed an upgrade of its target price by Goldman Sachs from $11.80 to $18.40 to reflect the sharp jump in daily traded volume.

But the biggest loser was Hong Kong conglomerate Jardine Matheson which fell 70 US cents to US$28.30 with 560,000 shares traded, as lost favour with investors following its exclusion from the new STI which was unveiled last Friday.

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