STI set for slight improvement

There was previously a lack of market catalysts.

OCBC Investment Research said:

The rally by US stocks last Friday night and the strong Nikkei start (up 1.2% now) are likely to cue the local bourse to a more optimistic opening this morning.

As a recap, the STI had traded in a rather muted tone in the last session due to a lack of market catalysts; by the close, the index was just about 0.1% higher.

But with today’s tone likely to improve slightly, we could see the index testing and potentially overcoming the 3000 psychological hurdle.

Beyond that, the next obstacle lies at the 3020 support-turned-resistance. On the downside, 2980 is still the immediate base with the subsequent support pegged at the 2930 key troughs.

IG Markets Singapore meanwhile noted:

Having just enjoyed an unexpectedly strong week, global markets remain on a knife edge with uncertainty over Greece and the US taking centre stage again.

Last week traders were buoyed by a number of factors including better-than-expected PMI data, notably out of China. While the Greek debt talks stalled there is fresh hope they will be end successfully today.

This optimism buoyed markets at the back end of last week, although it is far from a foregone conclusion. However, the Troika are hostage to Greek demands right now and look like they will cave in and reduce Greece’s debt-cutting targets.

If you push the Greeks too far they will simply threaten to leave the euro and bring down the whole house-of-cards the Troika has been working so hard to keep up.

With European finance ministers meeting today, there is high expectation in the air that Greece will be given the all-clear. This has seen the euro pushes close to $1.30, currently trading at $1.297 this morning.

Euro sentiment was also helped by the German Ifo business survey which rose for the first time after six months of decline. With the German economy the engine of the eurozone this will give a big boost to confidence in the region.

While Wall Street trading was broken up by Thanksgiving celebrations it did come online on Friday for half a day. This saw the benchmark S&P 500 lift 1.3% while both the NASDAQ and Dow Jones Industrial Average gained 1.4%.