Daily Markets Briefing: STI down 0.5%

Expect some gains today.

According to OCBC, the strong rebound on Wall Street could provide some reprieve to the local bourse this morning (Nikkei +1.3% higher already), especially with the STI looking oversold after its 17% tumble since 21 Jul.

Here's more from OCBC:

While we expect the index to easily take out the immediate 2900 resistance (tested but failed yesterday), the real test lies at the 3000 mark; continued failure to sustain above this level could see the index slipping back towards 2800 region.

In that case, it may just be another technical rebound and we could see more investors using it to unwind stale longs.

On the downside, we peg the immediate support at 2860, ahead of 2800; but if the latter gives way, it could lead to a return to around 2698 (early Jun 2012 low).