Daily Markets Briefing: STI down 4.3%

Another pullback is likely today.

According to OCBC, the sharp losses again on Wall Street overnight could continue to weigh on local sentiment this morning, particularly since the Nikkei has opened nearly 2% lower.

However, with the modest recovery in the US index futures, a potential technical rebound could be seen soon, given that the STI looks heavily oversold after yesterday’s 4.3% plunge.

Here's more from OCBC:

However, we think that investors may continue to use any rebound to unwind stale longs, as the longer-term picture for the STI remains quite bleak.

Should the index fail to retake the key 3000 level, we could still see it slipping back towards the 2800 region, breaking which, it could lead to a return to around 2698 (early Jun 2012 low).

On the upside, we peg the initial key hurdle at 2900, ahead of 2950.