THE two central bank meetings this week were supposed to be non-events - the US Federal Reserve was expected to keep interest rates steady while expressing caution about the state of the US economy, while the Bank of Japan (BOJ) was expected to announce more monetary stimulus to revive its flagging economy.
As it turned out, only the Fed followed the script which the market had written, while the BOJ's decision to hold off from pumping more money came as a shock that gave traders the perfect opportunity to short the market - again.
The outcome was that the Straits Times Index weakened every day of the week, losing 102 points or 3.5 per cent in total at 2,838.52, including a 23.78 points drop on Friday.
Adding to the incentive to sell or go short was Thursday news that the US gross domestic product slowed to 0.5 per cent quarter on quarter in Q1 from 1.4 per cent in Q4 2015.
Liquidity in the local market, having picked up slightly in March and early April to an average of S$1.4 billion to S$1.5 billion daily, has fallen back and this week hovered around the S$1 billion mark.
On Friday though, selling of the banks saw turnover increase from Thursday's S$1.06 billion to one billion units worth S$1.15 billion. Excluding warrants, there were 170 rises against 225 falls.
Among blue chips, banks were the prime plays as UOB and OCBC reported their first-quarter figures on Thursday and Friday respectively - the former registering a 4.4 per cent drop in net profit to S$766 million for the three months ended March 31, 2016, and the latter a 14 per cent fall to S$856 million. All three banks ended weaker on Friday.