OVERNIGHT MARKET : Implications for Singapore

US equities posted modest gains on Friday but still fell for the week as fears over stimulus withdrawal dominated investor sentiment.

P&G (+2.9%) led gains for the Dow on Fri but the index fell 1.8% for its worst week performance since Apr. The S&P 500 saw some bargain hunting for defensive sectors on Fri but lost 2.1% for the week. Rounding off the major indices, the NASDAQ Composite declined 1.9% for the week. NYSE composite volume exceeded 5.6b (4.8b previously).

WTI Crude for Aug lost US$1.45, or 1.5%, to end at US$93.69/barrel while Brent for Aug delivery lost US$1.24, or 1.2%, to settle at US$100.91/barrel. For the week, WTI and Brent lost 4.5% and 4.7% each.

Gold for Aug delivery added US$5.80, or 0.5%, to end at US$1,292.10/ounce while Silver for Jul gained 14 cents, or 0.7%, to settle at US$19.96/ounce. For the week, gold and silver lost 6.9% and 9.1% each. 

Implications for Singapore

The modest gains by the US indices last Friday night and the positive Nikkei start (up 0.9% now) could provide some mild inspiration to the local bourse this morning.

Despite plunging below the 3100 key support intraday on Friday, the STI managed to regain most of its earlier losses and close back above this vital level.

With today's tone likely to turn a tad more optimistic, the index could inch higher in the direction of the 3230 key resistance; however, the risk of investors selling into strength again as the index recovers still remains.

Beyond the 3230 level, the next obstacle is pegged at the 3320 resistance. On the downside, 3100 is still the immediate support, followed by the next base at the 3000 psychological level.