Selling pressure to continue amid few positive catalysts

LOCAL shares could continue to bleed in the week ahead following last week's bruising tumble in global stock markets, as near-term positive catalysts remain few and far between and many investors shy away from what they perceive as falling knives.

The Straits Times Index (STI) has now slid a depressing 11.7 per cent from the end of 2014 after it closed below 3,000 points on Friday, and looks set to remain there or slip further.

One hint of more weakness to come is the accelerated selling on Wall Street on Friday, which was viewed as the first significant correction in US stocks after a six-year rally. That saw the Dow Jones Industrial Average and the S&P 500 each lose a little above 3 per cent on the day. This brought the Dow down to around 10 per cent below its May high, while the broader S&P was over 7 per cent lower than its peak in May.