Investors in the Singapore market could be forgiven for feeling like victims of a Greek tragedy today. After slowly driving the benchmark Straits Times Index (STI) into positive territory, all the gains eked out this year have been swept away in days.
It is reminiscent of Sisyphus, an ancient Greek king forced to push a boulder up a hill, only to watch it roll down again.
To put it in stark numbers, about $36 billion has been torpedoed from the local stock market since the start of this month.
And if market observers are to be believed, punters will have to weather more storms before the going gets easier.
The year started off on wobbly footing, with stocks immediately slipping into the red as trading in January got under way.
It was only in late March that the STI regained ground, returning to the level at which it had ended last year. From there, it was an encouraging, if gradual, march towards a 14-month high of 3,356.08 at the end of July.
But as fears of interest rate hikes by the US Federal Reserve, a weakening eurozone economy, slowing growth in China and geopolitical tensions in Ukraine and the Middle East took their toll on the market, the gains became harder and harder to come by.
By yesterday, following the most volatile session on Wall Street since 2012, the local market had dropped back into negative territory for the year, closing 44.51 points, or 1.39 per cent, lower at 3,154.21.
CMC Markets analyst Desmond Chua said the recent sell-off may have been overdone, but he is not convinced that investors will stop punishing local stocks any time soon.
"In the past three years, October hasn't been a good month for equities. We see this following through until late December, when we might see a Santa Claus rally," he said.
CIMB Research analyst Kenneth Ng warned in a note yesterday, however, that the impact of the various factors currently hammering the markets could well be felt into next year.
In fact, it might not be the best time for intrepid investors to bottom-pick battered-down stocks in this sea of red, he said.
Instead, they would be well advised "to adopt more nuanced thinking about the earnings risks faced by the major sectors of corporate Singapore".
Developers may face more headwinds as China growth slows, while banks could see key earnings drivers - trade finance, wealth management and ASEAN growth - dragged down by higher interest rates and weaker consumption, Mr Ng said.
And crude palm oil and soya prices could follow crude oil prices downwards, which would put pressure on the earnings of commodities players, and the consumer sector would be affected by the indirect impact of lower commodity prices weighing on ASEAN economies, Mr Ng added.
Still, Fundsupermart general manager Wong Sui Jau noted valuations of stocks in Singapore and many other Asian bourses are cheap now. Several blue chips in Singapore have hit new lows, including Keppel Corp, ST Engineering, Genting Singapore and Golden-Agri Resources.
But even Mr Wong urged caution: "It looks like we are in for more volatility for the next couple of weeks. I don't expect we'll have good news any time soon."
The choice facing investors today boils down to this: risk more bleeding before seeing any profit, or risk missing out on a great deal. It is not quite as hard as the choice the Fates presented to Greek hero Achilles, between a short life of glory or a long life of obscurity, but when money is at stake it can feel almost as tough.
This article was first published on Oct 17, 2014.
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