Even with a mild 0.3% gain.
OCBC Investment Research said:
The muted reactions on Wall Street overnight are unlikely to provide any inspiration to the local bourse this morning.
As a recap, the STI continued to inch higher yesterday with a mild 0.3% gain but showed signs of faltering as it came near to the 2980 key support-turned-resistance.
And with today’s tone likely to moderate into a more neutral mode, we could see the index consolidating around current levels with the immediate base still pegged at the 2930 troughs.
Below that, the next base lies at the 2900 psychological support. Meanwhile, the subsequent resistance is still marked at the 3000 psychological hurdle.
IG Markets Singapore meanwhile noted:
Comments made by Ben Bernanke brought this week’s market rally to an abrupt end last night as he warned of the damaging effects of the fiscal cliff.
Sadly there was no repeat of Monday night’s huge bounce in risk assets as traders listened intently to the wise man of the Fed. Bernanke said the effects of the fiscal cliff are already starting to take their toll with regard to investment and spending.
He also questioned the ability to cushion $600 billion of tax hikes and spending cuts if a fiscal-cliff-saving deal couldn’t be struck.
This left Wall Street broadly flat. A big write-down for Hewlett Packard on its Autonomy acquisition didn’t help matters although more upbeat housing sector stats improved the mood.
Housing starts rose 3.6% in October hitting a four-year high. The housing sector has remained resilient through all the toils and troubles of the US economy, mirroring the euro which has remained steady in the face of a eurozone meltdown.
In Europe, another blow-up or downgrade is never far away for the beleaguered eurozone. Traders are still feeling the fallout from France’s downgrade by Moody’s although it shouldn’t come as too much of a surprise given the French government has done very little to restructure its debts.
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