GREECE'S debt crisis rattled investors again yesterday and sent markets south despite overnight gains on Wall Street.

Reassurance from Federal Reserve chairman Ben Bernanke that interest rates would stay low for some time pleased investors, who sent the Dow Jones up 91.75 points, or 0.89 per cent.

But concerns over the weak United States job market and poor housing sales data outweighed the promise of cheap money, and market sentiment turned bearish here.

The Straits Times Index (STI) took heart from Wall Street initially and opened almost 0.4 per cent higher at 2,774.09, but proceeded to lose the gains within the first half-hour of trading.

The turnaround that some market watchers expected never materialised, and the index headed downwards, closing 12.99 points lower at 2,749.15.

Shares elsewhere in the region were similarly unable to hold on to their early advance. Hong Kong's Hang Seng Index fell 0.33 per cent, while Tokyo's Nikkei closed 0.95 per cent lower.

Greece's mounting problems over debt and talk that its credit rating might be cut by Standard & Poor's within a month are scaring investors in Singapore.

Once-bullish bets that Greece's spillover effects would be minimal are giving way to real concerns that are driving the local market down despite positive earnings announcements this week.

IndoAgri lost early gains of 1.9 per cent and ended the day four cents down at $2.11. The fall came despite the palm oil producer reporting that full-year net income had doubled to $213 million from $111 million a year ago.

Coal miner Straits Asia Resources, whose full-year net income rose 7 per cent to $133.5 million from a year ago, also lost seven cents to $2.07.

'Everyone was hoping for it to be an 'up' day, but the fact that the European Union had not finalised a detailed bailout plan for Greece was viewed negatively by the market,' said Phillip Securities remisier Charles Chua.

He added that profit-taking on some shares also helped send the STI down.

Olam was one, losing three cents to $2.48, while Noble Group closed one cent lower at $3.10.

However, not all positive news went unheeded. All eyes were on City Developments as the company reported that fourth-quarter net income had surged 76.7 per cent from a year ago to $176.7 million on robust residential sales.

The counter rose two cents to $10.34, still a way off the fair value of $12.40 re-commended by DMG Securities.

Observers were also anticipating strong results from Sembcorp Industries, which closed six cents higher at $3.70.

The company reported that quarterly profit had more than doubled to $259 million due to increased deliveries of offshore structures.

Genting Singapore continued its slide, dropping three cents to 91 cents on a volume of almost 143 million shares. The stock has fallen 30 per cent this year, making it the worst performer on the STI.

Analyst Wai Kee Choong from Nomura Holdings cut the casino operator's price forecast to 68 cents from 77 cents, noting that the stock may weaken further once competitor Marina Bay Sands starts operating on April 27.

dzeng@sph.com.sg