Singapore market (22 Jun 12)

Singapore market: likely to take cue from the big drop in the US overnight, and to open lower. Moody’s downgrade of several global banks after the US market close likely to result in overhang in Asian markets today. Regionally, KOSPI and Nikkei are down 1.5% and 0.9% respectively. Expect continued pressure on the local commodities traders, Olam, Noble, Wilmar, as commodities tumbled into a bear mkt, with the S&P’s GSCI Spot Index of 24 raw materials fell to 559, down 22% from this yr’s highest close of 716 on 24 Feb. Technically, the STI is likely to break down below the ascending trend channel. This would coincide with a dip below the 200day MA, potentially indicating the start of a new downtrend. Initial support is at 2800, followed by 2700.