Daily Markets Briefing: STI up 1.9%

Expect modest gains today.

According to OCBC, further gains on Wall Street overnight could continue to keep local sentiment upbeat; although further sharp gains may be unlikely, after the STI’s 1.9% rebound yesterday.

While volume has remained largely unchanged, the average value/unit improved further to S$0.69 from S$0.57, it could be due to the “futures roll-over” effect, which could peter out after today, OCBC said.

Here’s more from OCBC:

In addition, the index is nearing the strong 2900 hurdle once again; the previous rally also peaked just shy of the next key 2918 resistance (38.2% retracement of the fall from 3549 to 2528).

Hence, investors should remain alert to potential profit-taking signals should the index fail to clear either of these hurdles.

On the downside, we peg the initial support at 2850, ahead of 2800.