Daily Markets Briefing: STI up 2.2%

Expect limited gains today.

According to OCBC, the modest rebound on Wall Street overnight should continue to keep local sentiment buoyant this morning; but we still expect the market to keep a very close watch on China as markets there will reopen today after their week-long National Day break.

“U.S. stocks closed higher on Wednesday, underpinned by a rally in healthcare stocks during an up-and-down trading session,” OCBC said.

Here’s more from OCBC:

And given the STI’s sharper-than-expected surge of 2.2% yesterday (also up 8% since bottoming around 2740), any negative news out of China could spark off profit-taking in the local bourse.

As before, the key challenge is to convincingly retake the key 3000 level; a failure to do so is likely to bring the bears back into the market.

On the downside, we peg the immediate support at 2933, ahead of 2900.