Daily Markets Briefing: STI down 1.2%

Medium-term decline looms in the horizon.

OCBC Investment Research said:

The more than 2% plunge by the US indices overnight is likely to spook the local bourse to another round of significant losses this morning.

After a 1.2% correction yesterday, the STI has now violated both its 2-year uptrend support and 3000 key psychological support; this could be the start of a more substantial medium-term decline.

And with today’s tone likely to deteriorate further, we could see the index sliding towards the 2940 immediate support (key trough) next.

Should this base give way, the next support lies at the 2900 psychological level. On the upside, 3000 is now the immediate support-turned-resistance, with the next hurdle at the 3030 level.