STI set for firmer open

Thanks to the recovery on Wall Street and the stronger Nikkei start.

OCBC Investment Research said:

The late recovery on Wall Street overnight and the stronger Nikkei start (up 0.5% now) could offer some positive cues to the local bourse this morning.

As a recap, the STI saw a poor start yesterday with a 0.6% lower opening. But as bargain hunters headed back into the market, the index rebounded to just a 0.1% loss by the close.

And with today’s tone like to turn a tad more optimistic, we could see the index inching higher towards the 3065 support-turned-resistance.

Above that, the next obstacle lies at the 3100 psychological resistance. On the downside, immediate support is pegged at the 3020 recent trough, with the subsequent base pegged at the 3000 psychological support.

IG Markets Singapore meanwhile noted:

Today Singapore releases inflation figures for September and many observers expect consumer prices to have edged up, given the increased liquidity within the market.

On the currency markets, the euro inched up to $1.307 last night despite Moody’s downgrading five Spanish regions. But FX traders liked the fact that a number of regional elections seemed to pave the way for a full-on bailout.

These uncertain hopes are continuing to drive the fate of the single currency as Spain toys with the idea of an EU bailout.

Commodities suffered last night among the weak corporate earnings as copper fell to a one-month low while oil slipped back after a brief recovery in the Asian session.

US crude fell 1.5% to $88.73 a barrel while Brent slipped 0.4% to $110.74.

In Singapore today the futures market points to a firmer open for the STI following on from yesterday’s lacklustre start to the week.

And still we wait for OUE to reveal who it is in talks with to mount a rival bid for F&N. Shares in OUE slipped back 3% yesterday as traders take some profits and await further details from its eleventh hour takeover talk.