Singapore Markets Morning Briefing - what you need to know for Mon Feb 13, 2012

Wall Street retreats 0.7% but there's positivity with the US index futures.

OCBC Investment Research said:

The 0.7% retreat on Wall Street last Friday night could cue the local bourse to a poorer start this morning but the stronger US index futures (+0.4% now) and Nikkei 255 index (+0.4% now) could mitigate the downside pressure.

Meanwhile, the STI is already showing signs that the market is toppish. Besides failing to test the 3000 key psychological resistance on Friday, the index slipped to a 0.7% loss and formed a bearish engulfing candlestick pattern.

And with today's tone likely to remain slightly more cautious, we could see the index pulling back in the direction of the immediate gap support at 2931-2939.

We see the subsequent support at 2874 (recent trough). On the upside, the 3000 key psychological resistance remains the toughest near-term obstacle to overcome, with the subsequent pegged at the 3070 support-turned-resistance.

Meanwhile RBS noted:

The Greek backlash to the recently agreed to austerity plans took a toll on risk sentiment, as equities finished down almost 1%. Risk sentiment had held in relatively well when the Eurogroup deferred any decision to ratify the second bailout for Greece but market participants finally exited some higher beta assets ahead of the weekend.

The USD largely benefited from the decidedly risk-off tone as EUR/USD traded down below 1.32 and AUD/USD breached 1.70. USD/JPY drifted slightly lower throughout the session but the USD still managed to hold on to most of its recent gains versus the JPY.