Tone however is forecast to turn more upside-biased.
OCBC Investment Research said:
The relatively strong rebound on Wall Street overnight and the positive Nikkei start (up 0.4% now) are likely to boost local sentiments this morning.
As a recap, the STI saw a minor pull-back yesterday; after a flat opening, the index slipped to a 0.3% loss by the close.
But with today’s tone likely to turn more upside-biased, we could see the index rebounding with the immediate obstacle pegged at the 3180 support-turned-resistance.
Beyond that, the subsequent hurdle lies at the 3200 psychological resistance. On the downside, 3140 is still the immediate resistance-turned-support, with the next base marked at the 3110 key resistance-turned-support.
IG Markets Singapore meanwhile noted:
Asia's mixed and lacklustre markets were followed by a similar picture in Europe, while a glimmer of hope of developments in the fiscal cliff negotiations meant US markets traded on a firmer note.
The S&P managed to gain 1.2%, its largest single day gain in almost a month, on the back of new found optimism that Washington will deliver a deal.
While the most interesting moves occurred in early trade on Monday, with the focus firmly on Japan and the sweeping return of the LDP to government, most markets remained range bound after that.
Though volumes are low, typical of the season, the assumption sustains that enough will be to done avoid the worst case scenario by politicians. Consequently, risk assets traded on a reasonably firm note.
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