STI sees technical rebound

Gains are likely to be limited by the negative Nikkei start, says OCBC Investment Research.

OCBC Investment Research said:

The rebound on Wall Street last Friday night could provide some positive cue to the local this morning but any gains are likely to be limited by the negative Nikkei start (down 0.4% now).

As a recap, the STI had already seen a technical rebound in the last trading session; following a 0.2% lower opening, the index recovered gradually to a 0.5% by the close.

And with today's tone likely to remain fairly optimistic, we could see the index inching higher in the direction of the 3040 support-turned-resistance.

Beyond that, the subsequent obstacle lies at the 3090 resistance (recent peaks). On the downside, 3000 psychological level is now the immediate base, with the next support level pegged at the 2980 troughs.

IG Markets Singapore meanwhile noted:

Singapore’s blue chip index ended last week on a positive note, lifting 0.5%, as it recorded a 14% plus rise for the first eight months of the year. Today the futures market is pointing to a slightly weaker open for the STI.

A report has emerged that Credit Suisse is looking to relocate back office jobs from Singapore to India and Poland where labour costs are cheaper. This has long been a fear that companies will start shifting jobs offshore as costs start to spiral in the city state.