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THE exhilaration savoured by investors in recent weeks as the stock market shot up like a rocket was replaced by a nauseous feeling like a hangover, as prices fell for a fourth straight day yesterday.
Investors were unnerved by a combination of jitters over last month's United States job data due to be released after the close of Asian trading and a surge in bad loan provisions at DBS Bank.
Regional market sentiment was also spooked, in late trading, by a wider-than-expected half-year loss of £1.04 billion (S$2.55 billion) from beleaguered Royal Bank of Scotland, which re-focused the spotlight on the health of global lenders.
To complete a very rocky picture, Shanghai and Hong Kong were shaken up by concerns that mainland banks might have to curb their loose lending policies.
This triggered further profit-taking here as the trading week drew to a close, causing the benchmark Straits Times Index (STI) to close 52.15 points or 2 per cent lower at 2,549.35, as it registered its biggest one-day loss in a month.
For the week, STI was down 109.85 points, or 4.1 per cent.
The result was similar on other regional bourses, with Hong Kong's Hang Seng shedding 2.5 per cent and China's Shanghai Composite Index losing 2.85 per cent.
Among the big losers here was DBS Group Holdings which fell 46 cents to $12.84, taking its losses for the week to $1.04.
This was despite posting a smaller-than-expected 15 per cent drop in net profit to $552 million for the quarter ended June 30.
But what worried traders was the bank's 'allowance for credit and other losses' surging to $466 million for the quarter from only $56 million a year earlier, as it 'reinforced its balance sheet against economic uncertainties'.
Profit-taking also took the other two local lenders lower.
United Overseas Bank lost six cents to $16.28, taking its weekly loss to $1.40, while OCBC Bank fell 15 cents to $7.43, giving it a loss of 39 cents for the week.
Another big loser was City Developments which fell 40 cents to $9.72, after its hotel subsidiary, Millennium & Copthorne, reported that second-quarter profit fell to £17.5 million from £27.1 million last year, hurt by weaker demand and lower hotel room rates.
The developer is scheduled to release its interim results on Thursday.
On the broader market, however, the souring of risk appetite failed to dent investors' enthusiasm for PEC, which made its trading debut on the SGX yesterday.
The firm, which is in the oil services industry, rose 80 per cent above its 40 cent issue price to end at 72 cents, with a heavy volume of 81.4 million shares.
Water treatment specialist Hyflux rose 14 cents to $2.64 with 3.4 million shares traded, after reporting a 15 per cent rise in second-quarter earnings to $25.87 million.
Looking ahead, traders are expecting trading to quieten down, as the corporate reporting season draws to a close.
The direction of the stock market will largely be directed by external factors such as the pace of recovery in the weak US economy, and steps taken by China to tighten lending policies by its banks.
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