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THE closure of China's market on Thursday and Friday to celebrate the end of World War II may have helped ease pressure on the Straits Times Index on Thursday, but it didn't help on Friday when the STI plunged 42.62 points or 1.5 per cent to 2,863.81 in tandem with a slide in the futures contract on the Dow Jones Industrial Average ahead of the release of the US August jobs data.
The only consolation - if it can be called that - was that the selling came in weak volume of 1.2 billion units worth S$1.1 billion. Excluding warrants, there were 145 rises versus 274 falls.
For the week the STI fell 92 points or about 3.1 per cent. Volume was weak over the five days as many opted to stay away from equities given the deteriorating economic outlook brought on China's alarming slowdown.
The STI's movements were largely dictated by gyrations in China as well as rises and falls in the Dow futures. A fall in the latter was taken as a signal that Wall Street was about to plunge in which case it might be advisable to bail out first; a rise meant going long was probably the better bet. On Friday, the Dow futures fell about 130 points in Asian trading, indicating a weak Friday for Wall Street, hence the selling here.