Singapore Markets Morning Briefing - what you need to know for Wed April 25, 2012

Analysts expect firmer opening for the STI following positive news from the US and Nikkei’s strong start.

IG Markets Singapore said:

Markets rebounded last night after Monday’s slump as Apple failed to crumble, much to traders’ delight.

The S&P 500 rose 0.4%, the Dow Jones Industrial Average was up 0.6% although the NASDAQ slipped 0.3%. Apple saw its profits for the last quarter almost double, a huge surprise given the concerns traders had about its growth prospects.

Apple accounts for more than 4% of the S&P 500 but its influence on the markets far outweighs this figure so this positive news is likely to lift investor spirits today.

The week was looking pretty dire after Monday’s huge sell-off across equities and commodities as eurozone economic and political worries weighed heavily on traders’ minds.

But last night’s recovery reversed some of those losses and has stabilised markets ahead of the Fed’s key April meeting tonight. This could lead to a big swing in sentiment, especially if the magic words of monetary easing are mentioned.

OCBC Investment Research meanwhile noted:

Despite the mixed and muted reactions on Wall Street overnight, the positive US index futures and strong Nikkei start (up 1% now) are likely to provide some inspiration to the local bourse this morning.

Following the relatively sharp correction on Monday, the STI initiated a mild rebound yesterday; following a 0.3% higher opening, the index inched up further to a 0.4% gain by the close.

And with today's tone likely to improve further, we could see the index recovering further towards the 3010 (recent peak) immediate resistance.

Beyond that, we still see the subsequent key obstacle at the 3030 vital resistance (various key peaks). On the downside, the immediate support remains at 2946 (recent trough), followed by the vital base at the 2900 key resistance-turned-support.