Singapore Markets Morning Briefing - what you need to know for Thurs Feb 23, 2012

There was retreat on Wall Street and the Nikkei started weak.

OCBC Investment Research said:

The retreat on Wall Street overnight and the weak Nikkei start (-0.2% now) are likely to dent local sentiments further this morning.

Following a 0.4% loss at the open yesterday, the STI fell below the 3000 key support to end nearly 1% in the red at its intraday low.

And with today's tone likely to remain more downside biased, we could see the index continue its near term downside momentum and trend lower in the direction of the 2950 immediate support (recent minor trough).

Below that, the subsequent base lies at the 2931-2939 gap support. On the upside, the 3000 psychological level has become the immediate resistance again with the next obstacle now pegged at around 3050 (support-turned-resistance).

IG Markets Singapore meanwhile noted:

The STI will be hoping to put yesterday’s dismal performance behind it today although it will be pushing against strong headwinds.

After the 1% slump and the symbolic drop back below the 3000 level many will be wondering if the bull run that has seen the STI put on more than 13% so far this year has run out of steam.

The initial catalyst of a Greek deal being struck pushed markets higher, along with a generally more upbeat outlook for the global economy. But this is no longer providing the stimulus the bulls need to sustain the run.

Instead we are seeing a bit of a lull as traders take some time out to assess the year so far and predict which way things will go, while taking some profits with them. The global economy is indeed in a healthier shape this year compared to the end of last year, the problem is there’s still a long way to go on the road to recovery.

RBS, on the other hand, reported::

Risk-seeking sentiment was broadly subdued following weaker than expected European PMI releases overnight. Gold, however, surged in the afternoon and remained well bid thereafter around the $1776/oz level in what was overall a relatively quiet New York session. The soft PMI prints likely bring down expectations for the German IFO survey, which will be released during the European morning.