STI locked in consolidation mode

There was significant buying interest on small to mid-cap stocks with increasing trading volume, says OCBC Investment Research.

OCBC Investment Research said:

The modest rebound on Wall Street overnight and the positive Nikkei start (up 0.4% now) are likely to improve local sentiments this morning.

As a recap, the STI was generally still locked in a consolidation mode yesterday; following a 0.1% higher opening, the index drifted sideways for much of the day before inching higher to a 0.3% gain by the close. At the same time, we have noticed significant buying interest on small to mid-cap stocks with increasing trading volume.

And with today's tone likely to remain more upside biased, we could see the index climbing higher in the direction of the 3040 immediate obstacle.

Beyond that, the subsequent resistance is pegged at the 3090 recent peaks. On the downside, the immediate support still lies at the 2980 minor troughs, with the next base marked at the 2930 minor trough.

IG Markets Singapore meanwhile noted:

In Singapore today, more speculation is likely to circulate the mystery partner for ThaiBev in its potential bid for Fraser & Neave. Or perhaps there is no mystery partner and this is another stalling tactic by the desperate Thais to block the APB deal. At the very least it puts some doubt in the minds of shareholders as they approach the Sept 28th EGM.

The futures market is pointing to a flat open for the STI this morning. Perhaps the presence of Wills and Kate will give local traders a lift from the lacklustre market.

Tonight, along with the German ruling we also get the European commission’s proposal on a single banking union and the Dutch elections just after.