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Singapore shares drop on Friday, down 0.4% on the week

SENTIMENT on Friday was dampened after the European Central Bank (ECB) unexpectedly kept interest rates unchanged and Wall Street's mixed earnings session on Thursday.

Singapore's Straits Times Index (STI) pared Thursday's gains, closing at 3,363.76, down 17.5 points or 0.5 per cent. The day's performance meant that for the week, the benchmark index lost 14.2 points or 0.4 per cent from last Friday's close of 3,377.96.

Elsewhere in the Asia-Pacific, markets in Australia, Hong Kong, Japan, Malaysia and South Korea ended Friday's session with broad losses while China's Shanghai Composite Index bucked the trend, ending in positive territory.

"The ECB disappointed markets looking for a 'whatever it takes' moment, as the shortfall on conviction, commitment and details overtook the dovish stance and easing bias," Vishnu Varathan, Mizuho Bank's head of economics & strategy, Asia & Oceania treasury said.

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But he noted that ECB president Mario Draghi was "not unreasonably coy about the prospects for further easing in the future", with the central banker alluding to a worsening economic outlook and that the ECB was looking to "potential new asset purchases".

In Singapore, trading volume clocked in at one billion securities, 84 per cent of the daily average in the first six months of 2019. Total turnover came to S$908.68 million, 86 per cent of the January-to-June daily average.

Across the broader market, decliners outpaced advancers 222 to 175. Meanwhile, the benchmark index had 18 of its 30 components closing in the red.

On 30.8 million shares traded, Singtel was the blue-chip index's most active, ending S$0.17 or 4.9 per cent lower at S$3.30 as investors closed positions on the telco. The bulk of the slide in price was due to Singtel trading ex-dividend of 10.7 cents on Friday.

The local banks ended slightly lower. DBS Group Holdings dropped S$0.03 or 0.1 per cent to S$26.88, OCBC Bank eased one Singapore cent or 0.1 per cent to S$11.76 while United Overseas Bank ended at S$26.93, down S$0.05 or 0.2 per cent.

Even though Wilmar International shares dipped one Singapore cent or 0.3 per cent to S$4.05, it remained one of the STI's main gainers this week, adding 3.3 per cent. Much of the piqued interest by investors in the last fortnight was attributed to Chinese regulators accepting an application by Wilmar's Chinese unit to list on the Shenzhen Stock Exchange.

One of the big gainers in the Singapore equities market was semiconductor play AEM Holdings, which surged eight Singapore cents or 7 per cent to S$1.22, thanks to an upward revenue revision for FY2019 to between S$265 million and S$280 million.

The counter got an additional boost from US semiconductor giant Intel - one of AEM's main clients - reporting Q2 revenue and net profit that beat street expectations.