Singapore shares, which broke a six-day fall on Monday, returned to losing streak on Tuesday on worries over the sustainability of economic recovery.
The key Straits Times index (STI) edged down 0.65 percent, or 11.91 points, to 1,826.32. Despite recent falls, the STI was still up 3.5 percent since the start of the year. "The expected recovery this year doesn't look as strong as we had earlier expected going into 2004," said David Lum, banking analyst of Daiwa Institute of Research.
Lum said signals of US economic recovery, one of Singapore's biggest trading partners, was not very encouraging.
The finance index, heavily weighted with banks, prolonged its falls, eroding almost all its gains since the start of the year because of its proxy play to the economy.
The finance index slid 0.64 percent to 1,498.41 points.
But the falls had lowered valuation of banking stocks.
"The banks are looking much cheaper now. I might change my call on DBS Group," said Lum, who rated DBS neutral.
United Overseas Bank Ltd was down 1.45 percent to S$13.60, and OCBC Bank dipped 0.82 percent to S$12.10.
DBS was steady at S$13.90.
The exchange's biggest firm, Singapore Telecommunications Ltd , fell 1.75 percent to S$2.24, bringing its falls to more than eight percent since hitting a three-year high of S$2.45 last Tuesday.
SingTel's rise followed hopes that it would reap hefty gains from the initial public offering by its associate Belgacom "It's probably just profit taking," said one telecom analyst at a European brokerage said.
In the broader market, losers beat gainers 171 to 135, with turnover edging up to 611 million from 597 million on Monday.
The weakness in the Singapore market also followed falls in the region as the Madrid blasts heightened investor concern about the effects of terror attacks on the global economy.
Noble Group Ltd fell almost 4.6 percent to S$4.16 after proposing a five-year 0.9-percent $200 million convertible bond issue, exchangeable into the firm's shares at S$5.864.