THE Straits Times Index's correction from a five-month high of 2,960 last Thursday extended into a third consecutive day on Tuesday when it dropped 5.62 points to 2,894.66, bringing its three-day loss to 66 points or 2.2 per cent.
Turnover was below-average at 847.8 million units worth S$963.4 million and excluding warrants there were 190 rises versus 207 falls in the whole market.
It was volatile session for the index as traders tracked the swings in Hong Kong and the Dow futures. The Hang Seng first dropped sharply before closing in the black while the June Dow contract traded 19 points higher at 5pm local time.
The index's fall was led by the three banks ahead of their release of first quarter figures. UOB will announced its results on Thursday, OCBC on Friday and DBS on Tuesday.
In an April 25 report on the banks, HSBC Global Research said that market concerns could shift away from asset quality to slowing growth.
"Slowing loan growth could lead to a lower loan deposit ratio and NIM (net interest margin) pressure. Also, capital that was tied up in loans would be freed up," said HSBC. It said that UOB is its preferred pick as it believes the interests of its major shareholders are completely aligned with long-term minority shareholders. "We also like DBS... given how it has optimised its balance sheet and business mix since 2009. We downgrade OCBC... to 'hold' from 'buy' following the rebound in its share price."