MOST Asian markets fell yesterday amid continuing global jitters over debt levels, especially in Europe.

In Singapore, traders were more interested in the welcome distraction of year-end festive activities, with precious few attractions to lure them into a tepid market.

The benchmark Straits Times Index (STI) stuck to its recent boring routine, moving mostly in a range of just a couple of points around the 2,800 support level.

By the closing bell, the picture was even less flattering. The STI had given up all of Wednesday's gains, closing 15.35 points, or 0.6 per cent, down at 2,781.86.

Other major market indexes in the region saw a similarly lacklustre day as Greece grappled with its debt woes and Spain, too, was downgraded.

After starting off on an upbeat note following Wall Street's overnight rally, Hong Kong's Hang Seng ended 0.19 per cent lower, while Tokyo's Nikkei-225 Index lost 1.42 per cent and Taiwan's Taiex Index was down 1.53 per cent.

Traders said one key reason share prices were moving in such a tight range was the usual year-end exercise by fund managers to dress up their portfolios - now in full drive.

One trader said: 'Fund managers are closing their books for the year. They will want the numbers to look as good as possible because bonuses are at stake.'

The task was made easier by dwindling trading levels. Fund managers simply rotated their purchases as they dressed up the price of one blue chip and then sold it off, before moving on to the next.

Banks here bore the brunt of the sell-off, as fund managers switched to other blue chips. OCBC Bank, United Overseas Bank and DBS Group Holdings each ended 10 cents down - after hitting year-high levels last week.

Defensive plays were in vogue for the window-dressers. ST Engineering and SIA Engineering gained two cents each to $3.16 and $3.15 respectively.

Transport giant ComfortDelGro rose three cents to $1.55 as Credit Suisse kept its 'outperform' rating for the stock. It said ComfortDelGro was best positioned to benefit from an economic recovery. Rival SMRT Corp, however, fell two cents to $1.80.

Weakening crude oil prices also took a toll on Keppel Corp, which fell nine cents to $8.20. This was despite a mid-day announcement by the rig builder that it had won three contracts worth $160 million.

A softening of palm oil prices also took the momentum out of the rally that had been enjoyed by commodities plays. Golden Agri-Resources fell one cent to 47.5 cents. Wilmar International, however, closed unchanged at $6.33.

On the broader market, overall volume stayed at a fairly low 1.59 billion shares worth $1.41 billion, as retail participation dwindled with the school holidays in full swing.

engyeow@sph.com.sg