STI set for weaker open

No thanks to the mild retreat on Wall Street overnight and the muted Nikkei start.

OCBC Investment Research said:

The mild retreat on Wall Street overnight and the muted Nikkei start (flat now) are likely to keep the local bourse on the back-foot this morning.

As a recap, the STI has started to moderate its ascent just below the 3090 resistance yesterday; after opening some 0.4% higher, the index drifted slightly lower to just a 0.3% gain by the close.

And with today's tone likely to turn more cautious, we could see the index hovering around current levels with the immediate obstacle still marked at the 3090 key peaks.

Beyond that, the subsequent obstacle is pegged at the 3160 support-turned-resistance. On the downside, 3040 is immediate resistance-turned-support, with the next base lying at the 3005 minor troughs.

IG Markets Singapore meanwhile noted:

There is also a lot of geo-political tension in the air which is keeping traders cautious.

Israel has warned that Iran could have a nuclear bomb in as little as six months’ time while Japan has been forced to shut down factories in China over rising animosity between Asia’s two biggest economies.

Traders are still playing a guessing game trying to work out where QE3 money may be destined for if it makes its way to Asia. Commodity stocks and property are two current favourite bets.

In Singapore today, the futures market points to a slightly weaker open.