Singapore shares finished flat on Tuesday after hitting a 34-month high at midday as sentiment was dampened by news that the government was planning to divest part of its stake in Singapore Telecommunications Ltd.
SingTel, Southeast Asia's largest telecoms firm, asked for a trading suspension for its shares on Tuesday afternoon, pending an announcement by parent Temasek Holdings Ltd, which owns 67 percent stake of the company.
The key Straits Times index (STI) ended 0.06 point up at 1,828.72, off its midday high of 1,853.27, the highest closing since March 2001. Robust domestic manufacturing data in December had encouraged investors to snap up blue chips and technology stocks in the morning.
The Singapore bourse rose 32 percent in 2003 after three straight years of losses.
"The market has pulled back on the SingTel announcement, with the market speculating that Temasek will place out a sizeable portion of its stake in SingTel," said a senior dealer with G.K. Goh Securities.
DBS Group Holdings finished 3.3 percent higher at S$15.60, but tech stocks Chartered Semiconductor Manufacturing Ltd and ST Assembly Test Services Ltd both ended lower.
Chartered, the world's fourth largest supplier of made-to-order microchips, eased 1.7 percent to S$1.77, while chip testing firm ST Assembly closed 1.4 percent down at S$2.20.
Topping the actives was electronics contract manufacturer Hi-P International, which rose nearly 10 percent to close at 94.5 Singapore cents. Volume was a heavy 139 million shares.
In the broader market, losers outweighed gainers 275 to 126 as turnover rose to around 1.62 billion shares from Monday's 1.52 billion shares.
While the Singapore market's up-trend remains intact for at least the next three months, share prices are expected to retreat further, pending the details of the sale of Temasek's SingTel stake, dealers said.
"In the short term, the market is likely to succumb to profit-taking as it is already in overbought territory," said Samuel Wong, dealing manager with OCBC Securities.
The ST Index is seen in the range of 1,750 to 1,850 for the rest of the week, dealers said.