Hopes of positive US jobs report help rein in earlier loss

IT was a tale of two halves this week - the first half saw the Straits Times Index extend its losses from the previous week as emerging market (EM) worries took hold, and the second saw a rebound as short sellers covered their positions and as Wall Street placed a positive bet on Friday's US payroll numbers.

The first half's selling was perhaps to be expected given the jitters which have surrounded EMs for several months. The rebound was arguably also to be expected - traders cannot remain short for too long and the signs on Wall Street in the middle of the week were that the selling there was drying up, so short-covering on Thursday and Friday was always on the cards.

The three banks, SingTel and the Jardine group led the index below the 3,000 mark to the 2014 closing low of 2,960 on Wednesday. The rebounds on Thursday and Friday - which were also led by the banks, SingTel and the Jardine group - enabled the index to cut its loss for the week to 14 points or 0.5 per cent. In yesterday's session, the index gained 2…