Daily Markets Briefing: STI down 1.06%

Expect muted gains today.

According to OCBC, the rebound on Wall Street overnight could bring some reprieve to the local market, but we still expect overall tone to remain cautious.

We may yet get another technical rebound as the STI remains heavily oversold; however, failure to clear the key 2600 hurdle is likely to bring about more selling into strength as was the case yesterday, OCBC said.

Here’s more from OCBC:

On the other hand, valuations as a whole are getting more inexpensive, especially after the heavy sell-down in blue chips over the past week or so; average value traded per unit has jumped to over S$1.00. 

As before, 2521 will provide the initial support, ahead of the key 2500; assuming these levels hold, we may see a decent rebound from there to retest the 2600 hurdle.

Otherwise, the index could slide further to 2424 before we see any decent bargain hunting interest.