Singapore Stock Market Update: STI Technical Analysis & Forecast

STI MARKET REVIEW :

SINGAPORE stocks opened flat on Monday morning, with the Straits Times Index(STI) up 0.03 per cent, or 0.97 point, to 2,918.88 and ended lower to 10.1 points or 0.35% to 2907.80. 

STI came off from its intra day peak 2925.16 of and low of 2904.80.

LOCAL BOURSE

Singapore equities initially climbed up but the market ended on a low as a result of sluggish growth of asian economy. The market was on lower side due to the increase in risks in real estate investment trusts in 2016 because of weak economic fundamentals weighing on demand, while new supply is added into most sectors.Singapore REITs is expected to come back stronger to do more acquisitions in 2016.

MARKET FORECAST

STI is expected to consolidate in next trading session. Investors are still waiting for positive trend , but market is not showing positive trend. If it breaks the level of 3018 then the market is expected to go up.As fed is likely to increase its rate and also the slowing economic growth of asia will lead towards the sidewards or downwards movement of the market for now.

STI COUNTER SPECIFIC NEWS

• Citic Envirotech Ltd (CEL) has secured a Public-Private Partnership project in Liaoyang City, Liaoning Province, China worth $122 million.The project involves an investment into four wastewater treatment plants and its associated pipe network in Liaoyang City.
• Singapore container shipping firm Neptune Orient Lines has entered into exclusive talks for acquisition with France's CMA CGM SA, the world's third-largest shipper by capacity.
• KS Energy Group announced that a joint venture between PT Atlantic Oilfield services and PT Java Star Rig has won a contract for KS Java Star jack-up drilling rig worth US$2.8 million ($4 million).

GLOBAL FACTORS AND WORLD INDICES:

• China stocks ended lower, with the telecoms sector leading declines and as investors remained cautious ahead of a fresh batch of listings.The largest listed companies fell 0.6 percent, while the Shanghai Composite Index lost 0.5 per cent.
• Oil extended its decline as Venezuela predicted prices may drop as low as the mid-US$20s a barrel unless the Organisation of Petroleum Exporting Countries (Opec) takes action to stabilize the market.
• The yuan fell to a three-month low as the central bank weakened the currency's reference rate amid a dollar advance and on concern China will allow a decline to help its economy.
• The euro weakened toward a seven-month low after futures traders added to bearish bets and European Central Bank encouraged speculation.
• Malaysia's ringgit led losses in Asia on speculation as rally was overdone given that oil prices remain depressed and China's economy is still slowing.The ringgit climbed 2.1 per cent in the five days through ,rising along with other regional currencies after the Federal Reserve indicated it will increase interest rates gradually.
• Growing confidence that the US will raise interest rates next month boosted the dollar in Asia.US stocks capped their best week this year as investors digested growing signs the Federal Reserve thinks the world's top economy is srong enough to handle a rate rise next month.
• Iron ore price will drop below U$40 a metric ton before year-end, and trade in the US$30s in 2016 as demand in China sputters.
• Europe's main stock markets fell at the start of trading, with London's benchmark FTSE 100 index down 0.7 per cent to 6,293.27 points, awaiting regional data.
• Hong Kong shares fell, taking cues from weak mainland markets and as investors braced for a likely rise in US interest rates next month.The Hang Seng index fell 0.4 per cent, to 22,665.90, while the China Enterprises Index lost 0.7 per cent, to 10,229.43 points.
• SINGAPORE inflation eased at -0.8 per cent, mainly due to the lower costs of oil-related and retail items.This meant core inflation, which excludes the costs of accommodation and private road transport, moderated as well to 0.3 per cent - lower than the previous month's 0.6 per cent.