Singapore shares, like its Asian peers, tumbled yesterday, spooked by the Dow's 666-point plunge last Friday, its worst since June 2016.
Wall Street was hit after the rise in January wages - the most since 2009 - sparked expectations that wage inflation is finally picking up. It did not help that the Fed said it now sees inflation reaching its 2 per cent target this year, leaving bond traders guessing if there are three or four rate hikes to come.
But experts in Singapore appear more sanguine, if not relieved, about yesterday's retracement from the heady heights of January.
"It is quite a concern when markets keep climbing to the length of bull market we had without any correction. That's quite unusual. So, to have some correction is healthy," said Mr Joel Ng at KGI Securities' research department
"I would say this is a mild correction, a healthy one."
Chief market analyst Naeem Aslam at ThinkMarkets also sees this as a healthy pullback, saying: "A 10 per cent correction could take place as this was long overdue."
The benchmark Straits Times Index (STI) opened at 3,483.07, before it ended at 3,482.93, down 46.89 points, or 1.33 per cent, from last Friday's close. About 2.8 billion shares worth $1.8 billion were traded, with 101 gainers to 445 losers.
Its near-term support is now pegged at 3,450 to 3,480, according to experts at DBS Group Research, which has a base-case year-end objective at 3,688, and an optimistic case scenario at 3,800.
Despite yesterday's correction, the STI is still some 20 per cent above last year.
"We expect 2018 to be positive, but with more volatility in the equities market," Mr Ng said.
The 30-day volatility gauge for the MSCI Asia-Pacific gauge yesterday rose to the highest level in a year amid concerns over surging US Treasury yields. But according to Bloomberg, the index remains well above its trend line, suggesting its bullish trend may still be intact.
The equity rout came at a time when corporates are expected to unveil improved earnings.
After the market closed, FJ Benjamin Group reported it was back in the black for the second quarter ended Dec 31, 2017, with a net profit of $961,000, compared with a net loss of $7.3 million a year ago as it completed its painful restructuring and terminated loss-making brands.
SingPost bucked the market's downtrend, closing at $1.43, up five cents, or 3.6 per cent, in heavy trading.