STI closes at a year-high above 3050

The index continued to display resilience, says OCBC Investment Research.

OCBC Investment Research said:

Despite the mild retreat on Wall Street overnight, the positive Nikkei start (up 0.6% now) could limit any downside for the local bourse this morning.

As a recap, the STI continued to display resilience yesterday; despite a 0.3% lower opening, the index rallied to a 0.5% gain by the close, conquering the 3040 key resistance at the same time.

With today's tone likely to remain fairly buoyant, we could see the index building on yesterday's bullish break and recover further in the direction of the 3060 support-turned-resistance.

Beyond that, the subsequent resistance lies at the 3100 key support-turned-resistance. On the downside, the immediate support is now pegged at the 3040 level (now resistance-turned-support), followed by the 2980 minor troughs.

IG Markets Singapore meanwhile noted:

In Singapore the STI ended the session yesterday at a year-high above 3050. The futures market points to a slightly firmer open this morning as Asian markets deal with the mixed messages being projected from policy makers. Momentum may build up again for Fed intervention following Friday’s non-farm payroll data, depending on the figures. September 12th is the next key date for a Fed get-together.

But for now, hopes of ECB policy easing could drive markets higher. With so much hard-talking and convincing words from Draghi and his cronies many feel he has talked himself into a corner where ECB asset-purchasing is the only option on the table.

Fraser & Neave will be in focus today after rumours that it has approached Heineken about improving the offer for its stake in APB, whose share price has rallied as a result of the takeover talk.

Both APB and F&N may have seen some action with the latest talk that drinks giant Coca-Cola is circling Fraser & Neave’s soft drinks arm. However, shares are likely to be suspended today ahead of an announcement this morning.