Singapore shares closed 1.34 percent lower on Tuesday after US stocks tumbled, dealers said. The Straits Times Index fell 45.94 points to 3,372.64. Volume was 1.75 billion shares valued at 2.11 billion Singapore dollars (1.47 billion US). Declining issues outnumbered risers 573 to 216, with 921 stocks unchanged.
Banking stocks led the market's fall on news that Citigroup may cut more jobs to reduce costs and that HSBC plans to bail out two funds it manages. A move by Singapore banking giant DBS Group Holdings to fully settle a 1.1 billion dollar asset-backed commercial paper called Red Orchid Secured Assets also dampened sentiment in the local market, dealers said.
"The great overhang is the negative sentiment arising from potential provisions for any collateralized debt obligation exposure they may have," said Ismael Pili, regional banking analyst at Macquarie Securities. But Asian banks in general have minimal exposure to US subprime loans, he said.
DBS fell 20 cents to 19.20 dollars, United Overseas Bank eased 40 cents to 18.90 dollars and Oversea-Chinese Banking Corp was flat at 8.35 dollars. Property stocks fell after Citigroup warned that Singapore may face a supply glut in office space from 2010.
CapitaLand fell five cents to 6.80 dollars, Keppel Land retreated 15 cents to 7.65 dollars and City Developments was down 30 cents at 14.20 dollars. Singapore Telecom was down 12 cents to 3.66 dollars and Singapore Airlines lost 10 cents to 17.80 dollars.
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