Daily Markets Briefing: STI down 2.65%

Expect muted gains today.

According to OCBC, the sharp retreat on Wall Street overnight is likely to weigh further on local sentiment; and news that China has suspended its circuit breakers is also likely to add to the uncertainty.

While the STI already looks oversold after the 2.7% plunge yesterday, we could still see more downside risk as fear has now entered into the market; the STI is also expected to take the cue from how the Chinese markets perform later, OCBC said.

Here’s more from OCBC:

With the breaking of the key 2740 support yesterday, the next few supports at 2700, 2680 or even 2643 may be called into play.

Much firmer supports are expected around 2600 and 2521.

On the upside, we peg the immediate hurdle at 2740, ahead of 2800.