STI closes 0.1% lower

The index is forecast to slip further.

OCBC Investment Research said:

The continued retreat by US stocks over the past two sessions and the flat Nikkei start are likely to keep the local bourse on the back-foot this morning.

With most local investors absent from the market on Monday, the STI traded in a muted fashion for the entire session before ending 0.1% in the red.

And with today’s tone unlikely to see any improvements, we could see the index slipping further towards the immediate base marked at the 2980 key troughs.

Below that, the subsequent base lies at the 2930 key trough. On the upside, 3020 is the immediate support-turned-resistance, with the next obstacle marked at the 3065 support-turned-resistance.

IG Markets Singapore meanwhile noted:

In Singapore, SingTel can add its name to the disappointing corporate earnings after seeing Q2 net income dip 1.6% to $868 million. The telco has been hit by the strengthening Singapore dollar as it repatriates earnings from some of its overseas subsidiaries and partnerships.

But those foreign earnings are also under pressure themselves, namely India’s Bharti Airtel which saw profits plummet 30% along with weaknesses from its Australian unit Optus. With SingTel now active in 10 overseas markets across Asia and Africa, currency exposure could trip it up yet again as it looks to replace slowing domestic demand with international expansion.

There was more bad news from Genting as the novelty factor of Singapore’s casinos looks to be running out. The casino giant saw a 20% fall in gaming revenues for Q3 while profits slid 47%.

Investors hope this is a temporary blip and gamblers come back to tables when the economy picks up rather than the start of a more significant shift away from Singapore’s casinos. While junkets are banned here pressure may grow on allowing them in, in an effort to bring in more high rollers during the downturn.

On the commodity markets, oil has calmed down this week with US crude flat at US$85.34 a barrel while Brent has edged up 0.7% overnight to $108.26.

Gold continues to enjoy the uncertainty circulating global markets over the fiscal cliff as it remains at $1726 an ounce. The precious metal has enjoyed steady inflows from worried traders who are being held captive by events in Washington.

This morning the STI looks set for a weaker open based on the futures market.