STI heading to 1500

As anticipated, the STI started the morning significantly lower at 1566.81 (down 1.8%), weighed down by Wall Street's 6th consecutive month of losses last Friday, as well as continued weakness shown by the US index futures and Nikkei's early trading. As the morning progress, STI slid all the wayto a low of 1540.81 (down 3.4%) before ending the session at 1542.68 (down 3.3%).

Overall volume traded was 604m, up from Friday's 580m done at midday, as losers overwhelm gainers 304 to 82. All sectoral indices were down except for the healthcare sector (up 0.3%). Top actives include Golden Agri (unchanged at S$0.285), China Hongxing (-9.5% at S$0.095) and CapitaLand (-8.6% at S$1.81).

Elsewhere in Asia, markets also fared badly with Nikkei 225 down 4.0% at 7266.23, Hang Seng down 3.8% at 12321.04, KLCI down 2.0% at 872.84. US stock futures continue to paint a depressing picture as well; DJIA -1.3%, S&P500 -1.6%, Nasdaq -1.7%.


For the entire morning, the STI could not find any strength to overcome the pessimism as the index slid further south from Friday's session.

Although intra-day MACD has turned up in the morning, it is still mired in the negative territory while RSI is still fluctuating above the oversold region. At best, we anticipate that the index would struggle to stay afloat at current levels in the afternoon session.

We peg the immediate resistance at 1567 (morning intra-day high) followed by 1600 (psychological resistance). Meanwhile, the near-term support can be found at 1500 (psychological support), ahead of 1474 (Oct'08 low).

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