STI set for flat open with any pullback to be short-lived

Some SGX blue chips may get a boost from a proposed tie-up between the London Stock Exchange and SGX, says IG Markets Singapore.

OCBC Investment Research said:

The continued retreat on Wall Street overnight and the negative Nikkei start (-0.2% now) could cue the local bourse to a lower opening this morning.

But with the STI already showing strong signs of breaking above its near 5-year key downtrend resistance yesterday with a 0.8% higher close, any pullback today could potentially be short-lived.

Should the index rebound strongly again, we could see it recovering further to the immediate 3000 psychological resistance; the subsequent obstacle is marked at the 3030 key peaks.

On the downside, we now see the immediate support at the 2980 resistance-turned-support, followed by the next base at the 2930 minor trough.

IG Markets Singapore meanwhile noted:

In Singapore, traders are gearing up for advance GDP estimates out tomorrow (Friday the 13th). This date has connotations of bad luck, and this is fitting given the low estimates coming in at just 0.3% for Q2, compared to Q1.

But Q1 was a stellar quarter in terms of market performance and factory output as electronics and pharmaceutical production surged. Things have calmed down a lot since then and the economy is now chugging along at a more moderate pace.

Some SGX blue chips may get a boost from a proposed tie-up between the London Stock Exchange and SGX. The partnership will allow both bourses to easily trade each other’s shares, once it starts next year.

Singapore traders will be able to buy and sell in Sing dollars FTSE 100 constituent stocks which include the big boys of Royal Dutch Shell, BP, GlaxoSmithKline and Vodafone. While UK traders can pick up the likes of SingTel, DBS and OCBC.

Today in Singapore, with the STI in touching distance of 3000 again, the futures market hints at a flat open for the local market. Japanese stocks are lower ahead of the BoJ decision.