STI down 0.4%

The index is forecast to rebound.

OCBC Investment Research said:

The rebound on Wall Street overnight could provide a much-needed boost to local sentiments this morning.

As a recap, it was a generally muted session for the STI yesterday; it slipped a mild 0.4% to close just below the 3200 level.

But with today’s tone likely to improve, we could see the index rebounding in the direction of the 3230 immediate resistance (key peak) again.

Beyond that, the next obstacle lies at the 3280 key peak. On the downside, 3150 remains the immediate support for now, ahead of the 3110 key resistance-turned-support.

IG Markets Singapore meanwhile noted:

The early-year rally got a fresh push last night sending Wall Street to a five-year high, although Asia may not be singing the same tune today.

US equities were given a welcome boost from falling jobless claims while housing starts surged. The benchmark S&P 500, NASDAQ and Dow Jones Industrial Average all gained 0.6% last night.

But bullishness was non-existent in Asia yesterday, as caution spread through regional stock markets ahead of China’s Q4 GDP print later this morning. The tense anticipation of these numbers could curb Asian traders from taking on last night’s optimism.

Expectations are for 7.8% growth for the last three months of 2012, which would trump the 7.4% notched up in Q3. But there is still the prospect the numbers may disappoint, which is leading to a sense of nervousness in Asian trading.

Yesterday, the Shanghai Composite gave up 1.1% while here in Singapore the STI closed 0.4% lower, as the index continues to yo-yo above and below 3200 points.