STI closed more than 0.2% lower

The index is forecast to inch higher in the direction of the 3090 resistance.

OCBC Investment Research said:

Despite the muted reactions on Wall Street overnight, the positive Nikkei start (up 0.3% now) could offer some consolation to the local bourse this morning.

As a recap, the STI had started positively yesterday but lost its ground subsequently; despite recovering as much as 0.3% intraday, the index ended the day more than 0.2% lower.

However, with today's tone likely to show some improvements, we could see the index inching higher again in the direction of the 3090 resistance (recent peaks), while the subsequent obstacle is marked at the 3140-3172 gap resistance.

Below the immediate base at the 3040 resistance-turned-support, the next support is still pegged at the 2980 troughs.

IG Markets Singapore meanwhile noted:

On the local front, Singapore’s economy could weaken this year, according to warnings from the IMF, which has cited weaker global demand due to the eurozone crisis. The IMF has forecast growth to come in under 3% this year, rising to 3.5% in 2013.

Inflation is likely to remain stubborn in the 4.5% range with many upward pressures on consumer prices from a tight labour supply.

The STI could open weaker this morning, challenging any rebound back above 3050 today on the Singapore blue chip index.

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