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Singapore shares close lower

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THIS week's main driver was the minutes of the US Federal Reserve's Open Markets Committee (FOMC) meeting, which indicated that China is no longer a concern and that although interest rates will be raised at the December FOMC meeting, the pace of rate hikes thereafter will be gradual.

This information was apparently welcomed by the market, leading to a big jump on Wall Street on Wednesday which prompted a rebound here on Thursday.

We say "apparently" because a more likely explanation for that bounce was that the Fed minutes triggered short-covering that produced a large bounce because of the aggressive amounts of short selling that preceded it.

On Friday, once the short-covering was completed the selling resumed and the Straits Times Index weakened by 1.92 points at 2,917.91. Over the week, it dropped 8 points. All throughout volume was weak, hovering below S$1 billion per day. Turnover on Friday was 998.9 million units worth S$752.3 million and excluding warrants, the advance-decline score was 161-227.

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Banks have been at the forefront of all the index's moves every day as traders grapple with what the future holds for the banks.

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