Daily Markets Briefing: STI down 1.1%

Expect muted gains today.

According to OCBC, although Wall Street rebounded from early losses to end mostly flat overnight, we note that the US index futures are slipping back into the red; and with the Nikkei down 0.9% in early trade, this could keep local sentiment wary, especially ahead of the upcoming CNY long weekend.

Here’s more from OCBC:

As expected, the breach of 2600 brought the STI down another 1.1% yesterday, adding to the previous session’s 0.9% drop; while we may get a technical rebound along the way, the index still looks poised to ease further towards 2521 or even 2500 in the near term.

Hence, selling into strength may still be the favoured strategy for now.

On the upside, we peg the initial and key resistance at 2600 (which has proven to be very resilient thus far), ahead of 2650.