Singapore Markets Morning Briefing - what you need to know for Mon March 5, 2012

Last Friday's session in the US was muted and the Nikkei started flat.

OCBC Investment Research said:

The local bourse is unlikely to get any inspiration from the muted US closing on Friday, as well as the dull Nikkei start (currently flat).

Instead, we may start to see some modest profit-taking on Friday’s 0.5% gains, especially since the index has again failed to hold above the key 3000 level.

Daily technical indicators are also looking mildly negative – we note that the MACD has been negative since 21 Feb and that was when the index hit the YTD high of 3031.

As such, there is a risk that the STI could ease back towards 2950 (30-day moving average), ahead of 2931 (23.6% retracement of rally from 2606 to 3031). We continue to peg 3000 as the initial cap, ahead of 3011 (where the STI could trigger a bullish parabolic buy signal).

IG Markets Singapore meanwhile noted:

The STI could be taking a breather from the roller-coaster start to the year or this may be the calm before the storm. Whatever the reason, the market has been decidedly lacklustre as of late with lower volumes and a lack of direction.

Last week the STI failed to get going despite a mixture of positive and negative news from the US and Europe. However, it still ended Friday in positive territory, up 0.5% in what was a subdued week.

But given this was a week where €530 billion of cheap money flooded into Europe, traders may have been hoping for a better response. No such cheap money is expected this week, although you never know while the US, Europe, China and Japan still have the keys to their central bank’s vault doors in their pockets.

Lacklustre looks to be the buzzword this week and US and European markets definitely lacked any sort of sparkle, or gains, after Friday’s session pointing to a quiet start in Asia. The Dow Jones Industrial Average, S&P 500 and FTSE 100 all drifted in Friday’s trade.

However, the US is on course to be the darling of world equities this week with non-farm payroll data on Friday hinting at an expansion of more than 200,000 jobs in February. Although a week is a long time for global markets and anything could dampen sentiment between now and Friday.

RBS, on the other hand, reported:

A quiet data calendar led to a muted session in risk-seeking sentiment, as US Equities sold off while Treasuries and the USD rallied. Canadian 2011 4Q and December GDP were the only releases of note. The S&P 500 slid only 4 points but failed to post a weekly close above the 2011 high 1370.58.