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Singapore shares fall from Greek contagion worries

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THERE were no surprises as the Straits Times Index (STI) on Monday fell 40.72 points or 1.2 per cent to 3,280.18, weighed down by the turmoil in Europe brought on by Greece's financial problems. The STI's loss came in tandem with a 2.6 per cent plunge in Hong Kong's Hang Seng Index and 3.3 per cent in the Shanghai Composite as Greek worries outweighed moves by the Chinese government over the weekend to shore up its plunging stock market.

Turnover was a moderate 1.3 billion units worth S$1.02 billion, and excluding warrants, there were 93 rises versus 392 falls.

The selling had been widely expected, given news over the weekend that the Greek government has called a referendum on whether to accept the demands of its creditors and the subsequent decision by the European Central Bank not to increase its emergency liquidity assistance to the country's banks.

All three local bank stocks were hit on Monday, in percentage terms led by OCBC which dropped S$0.12 or 1.2 per cent to S$10.10 on volume of six million. In a June 24 report on the banks, Credit Suisse said that these banks are one of the key beneficiaries in a rising rate environment, driven by net interest margin improvements offsetting slower volume growth.