AND so it goes on. It was yet another volatile week for the Straits Times Index as it danced in tandem with rises and falls in oil prices, the Dow futures, and to a slightly lesser extent, stock prices in Hong Kong and Shanghai - extending a run of volatility that stretches back many months. On Friday, thanks to a heavy push on Singtel that added 20 points to the STI, the index gained 64.72 points or 2.5 per cent at 2,623.21, enabling it to reduce its loss for the week to just 6 points.
Despite the index's seemingly strong bounce, few dealers were impressed, reporting instead that activity was "very quiet". Singtel's S$0.22 or 6.3 per cent surge to S$3.70 came with 47.7 million traded and no query from the Singapore Exchange.
Complicating the picture and no doubt adding to the swings were heightened short-selling and short-covering. According to a CNBC report on Wednesday, shorting in the Singapore market in January amounted to S$5.6 billion, about 25 per cent of total volume and up from December's S$3.2 billion.
Using data from Credit Suisse, the report said the highest short-selling volume was for Wilmar, Golden Agri, SembCorp Industries and Keppel Corp - not surprising, given the weakness in commodity and oil prices.
On the downside early in the week was news that China's manufacturing continues to contract, adding to worries of a global slowdown at a time when the US is raising interest rates - or at least that was what it planned to continue doing when it raised rates in December.