Daily Markets Briefing: STI down 0.1%

Don't expect gains today.

According to OCBC, with the STI’s chart already looking very toppish, the sharp drop on Wall Street overnight is likely to spark a strong sell-off in the local bourse this morning; Nikkei is down 0.8% in early trade.

Here's more from OCBC:

Furthermore, the STI has not only convincingly filled the minor gap at 3375-3381, but it has also formed a bearish reversal candlestick yesterday.

Given the expected strong sell-off, the immediate support at 3357 is unlikely to hold; the next 3302 support could also be taken out with ease. We peg the next firmer support at 3267.

Separately, we note of renewed interest in penny stocks, especially S chips, but the sharp run-ups for many of them seem unwarranted.

We also expect tech stocks to lead the decline, after Apple iPhone shipments missed forecasts; Microsoft also posted a net loss on Nokia write-down.