Daily Markets Briefing: STI down 1.7%

Expect a pullback today.

According to OCBC, renewed weakness on Wall Street overnight and news of heightened tensions in the Korean Peninsula could continue to weigh on local sentiment this morning; the Nikkei has resumed trading 1.8% lower.

Here’s more from OCBC:

Although the STI slipped another 1.7% yesterday, adding to the previous session’s 1.6% drop, there is a real risk of the index easing further to test the key 2500 support in the near term.

As before, as long as the STI fails to convincingly regain the key 2600 level, the market is likely to continue to drift lower and we may only see real buying interest emerging around the much strong support around 2424.

We are also not ruling out any potential technical rebounds along the way, but investors may continue to use these bounces to unwind stale longs.