STI drops 0.7% but pennies stay firm

AFTER Wednesday's unexpected 38-point jump, the Straits Times Index (STI) on Thursday sank to a 22.37- point or 0.7 per cent loss at 3,226.34, in line with weakness in Hong Kong and the Dow futures. Penny stocks, however, fared better with the broad market managing 200 rises versus 222 falls, excluding warrants.

Wall Street on Wednesday closed largely flat after release of the minutes of the latest US Federal Reserve meeting which showed that a third interest rate hike this year remains likely.

This could have been a factor behind the softness here which saw volume of 2.1 billion units worth S$1.1 billion traded. The average value per unit traded was S$0.5…