THE rain that fell across town yesterday was just a drop compared with the deluge of red ink that shell-shocked traders had to wade through.
A Wall Street plunge overnight sent the Straits Times Index (STI) nosediving 105 points at the opening bell and a disaster looked on the cards. But the bourse managed to claw back some of the losses and closed down 87.03 points, or 2.4 per cent, at 3,492.7 - a near two-month low.
About 4.11 billion shares worth, coincidentally, $4.11 billion changed hands, with losers overwhelming gainers 933 to 139. It all added up to a grim week for the STI, which also lost about 85 points over Wednesday and Thursday. The final tally for the week - down 158.68 points or 4.3 per cent.
Singapore's woes were repeated across the region with markets in Hong Kong, Tokyo and Kuala Lumpur all sliding.
The cause was, as it often is, Wall Street, which suffered its second-biggest points loss of the year, plunging 311.5 points on concerns about credit and the United States housing market.
Dealers say the sub-prime mortgage woes in the US have led investors to examine the loan portfolios of many Asian companies, especially banks.
Those fears sent United Overseas Bank down 80 cents to $21.70, while OCBC Bank fell 15 cents to $9.05.
DBS Group Holdings, which reported yesterday that second-quarter net profit fell 7 per cent to $560 million due to a one-time impairment charge, was 30 cents lower at $22.40.
Singapore Exchange fell 40 cents to $10.10.
Keppel Corp, whose stock was tipped to rise after it announced on Thursday that first-half net profit had risen 39.5 per cent from a year earlier, succumbed to the negative market sentiment and fell 50 cents to $13.30.
Chipmaker Chartered Semiconductor Manufacturing slipped five cents to $1.20 after recording a second-quarter net loss of US$24.7 million (S$37.2 million), compared with net profit of US$12.9 million a year earlier.
The blue-chip selldown also cast a gloom on penny stocks, with Abterra, Centillion, Ban Joo and Jade Technologies all registering declines, of between 2.2 per cent and 7.2 per cent.
It might not have looked like it yesterday but some analysts believe the bulls still have some running left in them and the correction was to be expected given the STI's giddy heights.
'The correction and high volatility are clearly a result of the recent run-up in the stock market, but do not mark the end of the bull run,' said Phillip Securities managing director Loh Hoon Sun.
But others are more wary. Fraser Securities research head Najeeb Jarhom said: 'Wall Street's decline may be a signal for world stock markets to undergo a more substantial pullback in the coming months.'
However, some shares did buck the downtrend, including Super Coffeemix Manufacturing, which rose three cents to 93 cents. The company said yesterday that it will invest an extra US$1.75 million in its joint-venture firm Tianjin Super Lifestyle Food Development Company.
Electronics distributor Enzer, whose trading halt ended yesterday, jumped 66 per cent to a five-year high of 34 cents. Investors anticipate a turnaround after the money-losing firm proposed a share placement to raise $3.1 million to fund growth.
