Singapore Markets Morning Briefing - what you need to know for Wed May 16, 2012

Weaker opening awaits the STI following the retreat on Wall Street and the poor Nikkei start.

OCBC Investment Research said:

The continued retreat on Wall Street overnight, coupled with the poor Nikkei start (-0.4% now) are likely to spook the local bourse to a lower opening as well this morning.

Despite staging a recovery with a 0.4% higher close yesterday, that is likely to be just a technical rebound. With market outlook still looking rather pessimistic now, we expect investors to take this opportunity to sell into strength today.

For now, 2900 (key support-turned-resistance) remains a very tough obstacle to overcome in the near term; this ahead of the subsequent resistance at the 2950 support-turned-resistance.

On the downside, 2850 (yesterday's intraday low) is likely to offer a mild support while we could see a firmer support at the next key base of 2800 (key resistance-turned-support).

IG Markets Singapore meanwhile noted:

The futures markets points to a weaker open for the STI this morning. Commodity giant Olam could be under pressure today as its Q3 profits dipped 22.5%. This adds to a growing list of Singapore counters revealing weak earnings.

Singapore Airlines saw a slight reduction in passenger numbers and cargo last month, adding to concerns that the island’s biggest companies are feeling the heat from the global slowdown.