STI eases to 0.1% gain

The index is forecast to resume its climb.

OCBC Investment Research said:

The recovery on Wall Street overnight and the strong Nikkei start (up 0.7% now) are likely to inspire the local bourse to an optimistic opening this morning.

As a recap, the STI was pretty much in a consolidation mode yesterday; opening 0.4% higher before easing to a 0.1% gain by the close.

But with today’s tone likely to show significant improvement, we could see the index resuming its climb in the direction of the 3140 immediate obstacle (gap resistance).

Beyond that, the next hurdle lies at the 3180 support-turned-resistance. On the downside, 3110 is still the immediate resistance-turned-support, with the subsequent base pegged at the 3080 minor resistance-turned-support.

IG Markets Singapore meanwhile noted:

In Singapore today, Singapore Airlines can look forward to banking $360 million from the sale of its 49% stake in Virgin Atlantic after agreeing to offload it to Delta Airlines. Despite acquiring the stake back in 1999 for $965 million this will go down as a profit, as losses had already been accounted for in previous years.

While major SIA shareholder Temasek will hardly be rubbing its hands with glee it may take the focus off some its other worrisome holdings, namely Olam, which has not rebounded the way its bosses had hoped.

Unsurprisingly we look set to start the day on a positive note in Singapore, as we currently price in a 1% gain at the open for the STI. This means we could open at a fresh high for 2012 and potentially have the 3200 level within in our sights for the first time since August 2011.