STI down 0.4%

Nikkei’s poor open and the retreat on Wall Street will not help.

OCBC Investment Research said:

The continued retreat on Wall Street overnight and the poor Nikkei start (down 0.8% now) are likely to cue the local bourse to a negative opening this morning.

Following the bearish technical signs displayed on Monday, the index continued to slip for the 2nd consecutive session yesterday and is now on the verge of breaching the 3200 psychological support.

And we could see this level being compromised as the index head for the next support at the 3150 key base.

On the upside, 3230 (key peaks) remains the immediate obstacle for now, as the subsequent key hurdle lies at the 3280 resistance (key peak in Jan ’11).

IG Markets Singapore meanwhile noted:

In Singapore yesterday the STI drifted 0.4% lower and could test the 3200 level today. For many traders, moving above 3200 was an artificial high with no real justification for breaking through this barrier.

This morning the futures market points to another relatively flat open for the STI, given the overnight leads that is hardly surprising.