Daily Markets Briefing: STI up 0.7%

But index failed to convincingly clear the 3200 mark.

Singapore Exchange noted:

The Straits Times Index (STI) ended 23.16 points higher or +0.73% higher to 3,178.63, taking the year-to-date performance to +0.36%.

The FTSE ST Mid Cap Index gained +0.59% while the FTSE ST Small Cap Index gained +1.16%.

The top active stocks were SingTel (+1.91%), Mirach Ener (+19.36%), DBS (+0.95%), Yoma (+6.94%) and Noble Grp (-2.62%).

OCBC Investment research said:

Despite the firmer Wall Street close, the more muted Nikkei start could also spark profit-taking in the local bourse today, especially if the index fails to convincingly clear the 3200 psychological hurdle.

While the STI could trigger a bullish parabolic buy signal at 3201, it may not a strong buy-in signal, given the recent choppy nature of the market.

Note that the 50-DMA has just cut down on the 100-DMA on 5 Jul, suggesting that the medium-term outlook is still slightly bearish.

As such, we suspect that the market may still be keen to retest a key support at 3135 (61.8% retracement of the rally from 2931-3464), which was recently breached and retaken.

A breach could herald a deeper retracement to 3000 and even 2931.