STI down 1% in week of dovish Fed comments and window-dressing

THIS week was all about two events - Janet Yellen's comments on Tuesday about US interest rates, followed by window-dressing of key blue chips as the end of the first quarter on Thursday drew closer.

As it turned out, US Federal Reserve chair Yellen's dovish statements about the need to proceed cautiously with rate hikes could not have been better timed as it gave funds the perfect opportunity to push the Straits Times Index up almost 54 points on Wednesday.

That rise was viewed almost universally with scepticism by market observers, so it came as no surprise that there was no follow-through for the rest of the week. Thursday's 31-point fall, followed by Friday's 22.41-point loss at 2,818.49, meant that Wednesday's rise was wiped out; over the week the index lost 29 points or just over one per cent.