IT WAS volatile session on the Asian markets against the backdrop of eurozone leaders meeting to hammer out a solution to the debt crisis. Weak Japanese exports and negative openings across European markets added to the nervy session. The Straits Times Index swung between a morning low of 3,031.56 and a later high of 3,051.38 before closing with a net 16.3 points loss at 3,049.47 points as Wall Street futures were in negative territory.
Jardine group shares and DBS were the heaviest laggards weighing down the benchmark index.
NOL fell 2.5 cents to $1.14 amid signs of continuing weakness in the shipping and global trade.
Overall market volume was weak, with just 1.1 million units worth some $983 million changing hands.
Top gainers included various property plays led by City Development, which gained 18 cents to $11.70. HPL was up seven cents to $2.66, while Haw Par gained seven cents to $6.38.
Commodity stocks were prominent on the actives list, with Golden Agri leading the board as it edged up a cent to 72 cents on 76 million shares. Noble Group, whose new CEO Yusuf Alireza is charting an aggressive strategy of accumulating US agriculture assets, was half-a-cent down at $1.25 on 47 million shares.
The company is targeting agricultural assets in the United States as it seeks to meet demand from China and sees potential for deals across its units.
Commodity trader Sakari was actively traded down to a low of $1.41, then pushed up in late afternoon trading to close at $1.48 for a 3.5 cents gain.
Going forward, analysts warn that after good quarterly earnings for the April-June period, sequential earnings growth could come under pressure, and thus weigh down stocks.
"Banks' management now guide for slower loan growth than their guidance three months back, a reflection of the slower economy," DMG observed. "This also led us to cut SIA cargo yields expectations. Genting continues to adopt a cautious VIP credit policy as they are cautious on the global economic environment.
Even Olam has guided for weaker contributions from its industrial commodities business of wood and cotton."
The broking house has a sum-of-parts target 12-month STI target of 3,168.
But Deutsche Bank takes a much more bullish outlook. It has a 12-month target of 3,275 points for the ST index, noting that market valuations remain priced a modest 14.4 times 2012 estimated earnings and 1.46x Price/Book, below historical averages of 14.9 times and 1.63x P/B.
"Our regional strategist believes that Singapore equities are seriously undervalued versus history.
The market has been gradually getting re-rated versus the region since 2008, reversing a prior decade-long de-rating.
Moreover, its safety and diversified market and yield have been attractions in these uncertain times."
While there is general consensus that the Singapore market is somewhat resilient and has upside potential, this will be punctuated by regular bouts of volatility resulting from swings in offshore newsflows.