STI closes with 1.1% gain

The index failed in its attempt to overcome the 3040 key resistance.

OCBC Investment Research said:

The muted reactions on Wall Street overnight and the poor Nikkei start (down 0.3% now) could cue the local bourse to a negative start this morning.

Despite rallying as much as 1.4% intraday yesterday, the STI failed in its attempt to overcome the 3040 key resistance. By the close, the index had given up some of its earlier gains to close with a 1.1% gain.

And with today's tone likely to turn a tad more downside biased, we could see the index inching back in the direction of the immediate base at the 2975 minor trough.

Below that, the next support lies at the 2930 level (another minor trough). On the upside, the subsequent obstacle is marked at the 3060 support-turned-resistance.

IG Markets Singapore meanwhile noted:

In Singapore, local investors will be analysing the latest annual report by sovereign wealth fund GIC to see how the big boys are coping with the global downturn.

GIC announced it has reduced its bond holdings down from 22% to 17% while increasing its cash pile from 3% up to 11%. This looks like a wise strategy as it sits on the side lines looking for bargains among global equities during the big sell-offs.

The STI powered ahead yesterday to break through a key resistance of 3030. The futures market points to a firm opening this morning which could see the local market push a yearly high.