Singapore share prices plunged 3.35 percent on Wednesday, clobbered by the escalating fallout from the crisis in the US subprime mortgage market, dealers said. News that more hedge funds are being squeezed in the US credit market's troubles led many investors to sell down portfolios, causing heavy losses across the region, they said.
The Straits Times Index fell 113.34 points to 3,273.25 on volume of 2.43 billion shares worth 2.61 billion Singapore dollars (1.72 billion US). Declining stocks outnumbered risers 798 to 148, with 626 issues unchanged.
DBS Vickers Securities retail market strategist Yeo Kee Yan said the worsening subprime mortgage woes in the US continued to be a drag and further declines are likely after the benchmark index broke through the 3,300-point psychological support level.
"The downtrend is still there, we could see the index correcting to 3,150 in the next few months," Yeo said. Apart from the unravelling of the US subprime credit market, Yeo said he is concerned that a sharp correction in the Chinese stock market could trigger another wave of selling across the region. A renewed spike in oil prices during the hurricane season in the United States could also add to the markets' volatility, he said.
Banking shares were among the hardest hit again, with DBS Group Holdings down one dollar at 20.20, United Overseas Bank off 60 cents at 20.90 and Oversea-Chinese Banking Corp down 35 cents at 8.35.
Property stocks were also weaker, with CapitaLand falling 35 cents to 6.90, Keppel Land down 20 cents at 7.90, and City Developments skidding 50 cents to 14.10. Singapore Telecom fell four cents to 3.46 as investors continued to ignore its forecast-beating first-quarter results released Tuesday. Singapore Airlines fell 60 cents to 17.60 and conglomerate Keppel Corp pulled back 60 cents to 12.00.