US equities rebounded overnight, led by strong performance in technology shares as investors tried to undermine trades and focus on the upcoming earnings and fundamentals.
RBA is set to announce key interest rate decision at 12:30pm Singapore time today, which is expected to remain unchanged.
Weaker-than-expected China Manufacturing PMI and Japan Business sentiment survey led to broad selloff in Asian equities on Monday. Offshore renminbi fell nearly 400 pips to 6.670 area yesterday and declined further to the 6.690 area this morning. This is the weakest level observed since Aug 2017. Fast depreciation in the currency has received attention from the policy makers, who are carefully monitoring the situation for clues of any systematic risks.
Shanghai Composite lost 2.5% to 2,775 area with blue chips leading the decline. Hang Seng Index is expected to open gap down after resuming trading following a public holiday. As Shanghai Composite lost ground after breaking down key support level of 2,800, opinions start to diverge among market participants. Some believe the downside risk is limited as cheap valuation is likely to provide some cushion, whereas others believe there is room for a deeper correction before market bottom-out.
‘Risk off’ sentiment prevails as more macro-data shows slowing in global growth, especially in export-oriented economics like Japan and China, both of which are more vulnerable to trade disputes and tariffs.
Singapore’s STI rebounded mildly following a strong US session last night. The local market has exhibited resilience against headwinds from overseas market. In the near-term, 3,200 and 3,300 remain at strong support and resistance levels.
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By Margaret Yang in Singapore
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