Singapore Markets Morning Briefing - what you need to know for Mon April 23, 2012

Corporate earnings beat analysts’ expectations and lifted US markets, while the IMF pledged an extra US$430 billion to help fight the debt crisis in Europe.

OCBC Investment Research said:

The mildly higher Wall Street close last Friday and the positive Nikkei start (+0.6% now) could provide a mild lift to the STI this morning.

However, market could continue to remain indecisive, given that the STI still looks uncomfortable staying above 3000 level.

Daily technical indicators continue to suggest a slightly more downside bias for now.

The STI looks boxed in by a triangle formation, with the top boundary at 3009; the bottom at 2997.

But we note that a strong buy signal would be generated around 2950, which is also close to the lower Bollinger band.

Expect the recent highs at 3033 to cap near-term upside.

IG Markets Singapore meanwhile noted:

Singapore equities are set for a cautious start this morning with no strong leads from Wall Street and Europe at the end of last week and plenty of macroeconomic pointers in the days ahead.

Friday finished on a more positive note, however, as US markets were lifted by more corporate earnings beating analysts’ expectations while in Europe the IMF pledged an extra US$430 billion to help fight the eurozone debt crisis.

The Dow Jones Industrial Average was up 0.5% at 13029. The S&P was 0.1% higher at 1379, while the NASDAQ shed 0.2% to finish at 3000. Markets were buoyed by strong revenues from the likes of Mcdonald’s, GE and Microsoft.

In Europe, traders have been distracted by the French elections which have added a layer of uncertainty on top of Spanish debt woes and general unease about a eurozone meltdown and years of recession.

In Asia this morning we have HSBC’s manufacturing flash PMI figures which is likely to lead to some cautious trading ahead of the announcement. This is normally a pretty significant event risk, particularly at a time when China growth concerns continue to be a hot topic. The previous reading was 48.3 and any major moves north of this figure could result in a boost of confidence.

Anything south of last month’s number and pressure mounts for a PBOC cut to the RRR borrowing rate.

In Singapore this lunchtime we have consumer price figures for March. Inflation eased slightly to 4.6% in February down from 4.8% at the start of the year and the Monetary Authority of Singapore will be hoping the downward trend continues.

But considering the MAS is speeding up the appreciation of the Singapore dollar to tackle inflation, it doesn’t expect consumer prices to come down drastically anytime soon. Market consensus points to a slight increase for March.