Singapore Markets Morning Briefing - what you need to know for Tues April 17, 2012

Markets were mixed on Wall Street and the Nikkei had a soft opening.

OCBC Investment Research said:

The mixed reactions on Wall Street overnight and the muted Nikkei start (flat now) are unlikely to provide much inspiration to the local bourse this morning.

As a recap, the STI initiated a technical rebound yesterday despite having a poor start; following a 0.6% lower opening, the index recovered steadily for the rest of the session to close around 0.1% in the black.

But with today's tone likely to turn more muted, we could see the index consolidating around current levels capped by the 3005 (recent minor peak) immediate resistance.

Beyond that, the subsequent key resistance lies at 3030 (key peaks). On the downside, 2945 (recent minor trough) is still the immediate support, followed by the subsequent key base at the 2900 vital resistance-turned-support.

IG Markets Singapore meanwhile noted:

Singapore equities open this morning to news that the non-oil exports shrunk by 4.3% on a year-on-year basis. Analysts had expected growth of 6.3% highlighting how volatile this data is to predict.

The reason for the fall was due to ship structures (down 99%), petrochemicals (down 13%) and primary chemicals (down 15%). Ship structures include oil rigs which can vary massively month to month.

But the less volatile sector of electronics grew 2.8% in March while pharmaceuticals rose 43%.

With production and new export orders expanding it could signal that the worst is over for Singapore’s manufacturing sector.

The fact that exports to the US grew by 4% last month will please traders, who will hope this trend will continue as the world’s largest economy slowly recovers.

The STI looks likely to open firmer this morning buoyed by better-than-expected US retail sales.

On Wall Street, markets were mixed, with the Dow enjoying gains, the S&P flat and the Nasdaq losing ground. Economic data was also mixed, with US retail sales coming in better than expected, but with the Empire State Manufacturing Index much lower than anticipated.

Among the major averages, the Dow Jones Industrial Average was up 0.6% at 12921. The S&P was 0.1% lower at 1370, while the NASDAQ shed 0.8% to finish at 2988.