STI set for weak open amidst uncertainty for global markets

The index had corrected heavily with a 1.7% loss after eight days of gains.

OCBC Investment Research said:

Despite the modest retreat on Wall Street overnight, the positive Nikkei start (up 0.4% now) could offer some consolation to the local bourse this morning.

As a recap, the STI had already corrected heavily yesterday with a 1.7% loss; this following eight consecutive sessions of prior gains.

As such, we could potentially see the index consolidating around current levels today with the immediate vital support still pegged at the 2900 level (key resistance-turned-support).

Below that, we see the subsequent base at the 2850 resistance-turned-support. On the upside, 2980 (minor peak) is the immediate obstacle to overcome, while the next lies at the 3000 psychological resistance.

IG Markets Singapore meanwhile noted:

Looking forward, China’s trade balance will be in the spotlight and investors will be looking for a trade surplus of approximately $22 billion and hoping for signs of resilience across both its imports and exports. The breakdown will be telling of China’s current growth profile.

A weak export number will fuel concerns that Europe’s recession is having a marked effect, while the import number will be a key influence of sentiment toward commodities.

The futures market is pointing to a weak open for the STI this morning given the uncertainty ahead for global markets.