STI loses 1%

Traders felt in no mood to add to the risk exposure, says IG Markets Singapore.

OCBC Investment Research said:

The retreat on Wall Street overnight and the poor Nikkei start (down 0.4% now) are likely to cue the local bourse to another pessimistic opening this morning.

As a recap, the STI unexpectedly saw a sharp bearish reversal in the last session; following a 0.1% lower opening, the index sunk to a 1% loss by the close.

And with today's tone unlikely to see any improvements, the STI could potentially slip further towards the 3040 resistance-turned-support.

Below that, the next base lies at the 3000 psychological support. On the upside, the immediate hurdle is now pegged at the 3110 recent peak, with the subsequent hurdle marked at the 3135 level (lower limit of gap).

IG Markets Singapore meanwhile noted:

In Singapore, furniture and electronics store Courts plans to list on the local exchange next week with an IPO price in the region of 77 cents a share. It will use the proceeds to expand into Indonesia. Courts is no stranger to the SGX having been listed before only to go private.

And it’s more good news for Thai tycoon Charoen as 20 properties within the F&N portfolio are revalued showing a tidy $500 million surplus. Charoen, who has been slowly creeping up his stake in F&N to 33%, is already in line to acquire the conglomerate at a hefty discount. Seeing more value in the $9 billion property portfolio of F&N makes the Thais even shrewder investors.

On the currency markets the euro has suffered from Spain continuing to be the weakest link in the Eurozone’s armour as it slips to $1.298 this morning.

On the commodity front, US crude dropped overnight but has since recovered to $90.60 a barrel. It is facing plenty of downward pressure as China growth expectations continue to be pared back. But it has reversed some of this downward spiral with political tension between Turkey and Syria threatening to reignite Middle Eastern fireworks.

Yesterday the STI lost 1% as traders felt in no mood to add to the risk exposure. Today an air of uncertainty is likely to keep things tight as the futures market points to a flat open.