STI set for weak open

A negative knee-jerk reaction in the local market is expected.

OCBC Investment Research said:

The sharp retreat on Wall Street overnight and the poor Nikkei start (down 0.7% now) are likely to cause a negative knee-jerk reaction in the local market this morning.

Despite managing a modest gain of 0.2% at the close yesterday, the index could face a significant selling pressure today, with the 3020 immediate support potentially losing its ground.

The subsequent support is still pegged at the 3000 psychological support.

On the upside, we still see the immediate obstacle at the 3065 support-turned-resistance, while the next key resistance is pegged at the 3100 psychological resistance.

IG Markets Singapore meanwhile noted:

In Singapore today we expect the Fraser & Neave saga to rumble on, perhaps with one of OUE’s strategic partners or the banks who will be fronting up loans revealed.

The futures market points to a weak open for the STI as a bearish cold wind blows in from the West.