Daily Markets Briefing: STI up 0.4%

Initial support pegged at 3157 mark.

OCBC Investment Research:

Fresh weakness on Wall Street is likely to weigh on local sentiment, triggering a bout of profit-taking, especially after the index’s 0.4% rebound yesterday.

Despite the STI being up, we note that losers actually led gainers by 262 to 181; this suggests that the overall sentiment remains largely muted.

News of fresh violence in Thailand and also of the first human bird flu case in HK could dampen sentiment further.

While we peg the initial support at 3157 (38.2% retracement of the 2990-3260 rally), we still think the index may need to edge lower to fill the 3051-3071 gap first.

On the upside, 3200 remains the key hurdle to overcome.