STI set for strong open

Thanks to the 1.5% rally on Wall Street overnight and the strong Nikkei start.

OCBC Investment Research said:

The 1.5% rally on Wall Street overnight and the strong Nikkei start (up 1% now) are likely to inspire the local bourse to similar gains this morning.

As a recap, the STI continued to consolidate in a narrow range yesterday; after opening some 0.3% in the red, the index recovered to close flat by the end of the day.

And with today's tone likely to improve significantly, we could potentially see the index gapping above the 3040 immediate obstacle at the open before heading towards the 3090 subsequent resistance (recent peaks) thereafter.

On the downside, the immediate support is still marked at the 3005 minor troughs, with the next base lying at the 2980 key trough.

IG Markets Singapore meanwhile noted:

In Singapore, traders could be celebrating more MBS (mortgage-backed securities) purchases at MBS (Marina Bay Sands) having finally seen the happy marriage of QE3 and the US economy. The big question is for how long will the honeymoon last?

For now, the futures market points to a strong open for the STI this morning as a result.