Daily Markets Briefing: STI down 1.36%

Expect muted gains today.

According to OCBC, continued weakness on Wall Street overnight is unlikely to bring any cheer to battered local sentiment this morning, even as the STI extends its losing streak for the 8th session yesterday with a steep 1.4% fall.

Here’s more from OCBC:

While overall volume inched up 10% to 1153.9m units traded, with average value/unit just 4% higher at S$1.10, losers overwhelmed gainers by 2.5:1; this suggests that the bears may have gained the upper hand.

Hence even if we do see a technical rebound (daily RSI is just 5% above the oversold region), we may see more selling into strength once again, especially if the index fails to regain the key 2800 hurdle soon.

But more worrying would be a convincing breach of the 100-DMA support (now at 2765); this could send the index sliding back towards 2700 or even 2600, given that the daily MACD is starting to fall below the center line.