Singapore traders to play catch-up
This after Chinese economic data was released during National Day celebrations, while local GDP figures have just been released.
OCBC Investment Research said:
The muted reactions on Wall Street over the past two sessions and the weak Nikkei start (down 0.5% now) are unlikely to provide much inspiration for the local bourse this morning.
As a recap, the STI retreated for the second consecutive session on Wednesday; despite a 0.1% higher opening, the index slipped to a 0.5% loss by the close.
And with today's tone likely to remain fairly muted ahead of the weekend break, we could see the index consolidating around current levels with the immediate obstacle capped at the 3100 immediate resistance (upper limit of gap resistance).
Beyond that, the subsequent obstacle lies at the 3140-3172 gap resistance. On the downside, the immediate support can be found at the 3020 minor trough, followed by the next base at the 2980 recent troughs.
IG Markets Singapore meanwhile noted:
Singapore traders will be playing catch-up today after Chinese economic data was released during National Day celebrations, while local GDP figures have just been released.
The STI will also be catching up on PM Lee’s speech which revealed a narrowing of this year’s GDP forecast down to 1.5% - 2.5%, from the previous 1%- 3%.
Revised Q2 GDP figures out this morning showed the economy did indeed shrink, but by a lower rate of 0.7%, compared to earlier figures of -1.1%. In the lead-up to these figures, forecasts were coming in at growth of 0.5% due to the volatile pharmaceuticals sector surging ahead.
But with year-on-year GDP growth of 2% for last quarter there is hardly any need to push the panic button. There was a significant upward revision in construction sector growth from 0.3% to 5.3% while services improved marginally from 0.4% to 0.8%.
These figures, and future GDP, manufacturing and trade numbers, are likely to keep observers on their toes as they prove difficult to predict. There is still so much economic uncertainty present in the second half of this year to gauge whether the local economy will hit its GDP upper-end target of 2.5%. But these numbers show an economy still growing modestly and resiliently despite the chill winds of global slowdown and eurozone crisis.