STI rebounds to just a 0.1% loss

This after losing as much as 0.5% intraday on Monday.

OCBC Investment Research said:

The mixed reaction on Wall Street overnight and the mildly higher Nikkei start (up 0.2% now) are unlikely to provide much inspiration to the local bourse this morning.

As a recap, the STI was pretty much unchanged yesterday; despite losing as much as 0.5% intraday, the index rebounded near the 3040 support to just a 0.1% loss by the close.

And with today's tone unlikely to see any significant improvement, we could see the STI continuing to consolidate above the 3040 resistance-turned-support, with the subsequent base lying at the 3000 psychological support.

On the upside, we continue to peg the immediate resistance at 3088 (recent high), ahead of the 3100 psychological hurdle.

IG Markets Singapore meanwhile noted:

Despite weak factory output data showing continued contraction across the world’s major economies many traders feel we are turning a corner.

China, the eurozone and last night the US all released figures which showed a modest improvement in manufacturing activity even if their PMI prints are still below 50.

This has raised hopes among traders that the global economy could be bottoming out, even though we are not far from three-year lows for factory output. But momentum drives equities markets and the prospects of a pick-up could be enough to keep the summer rally ticking along.

Last night Wall Street clocked up some healthy gains but these were pared back as the session ended. The S&P 500 rose 1.1% rise before ending the day up 0.3%. The Dow Jones Industrial Average finished 0.6% higher.