“We believe this August will be no exception, given uncertainties about global growth slowdown, inflation, and rising rates. We see the STI range bound over the next one to two months between resistances 3220/3260 and support at 3090, 3040, and 2985,” they add.
DBS Group Research equity analysts Yeo Kee Yan and Janice Chua say that the market faces a “correction” this month according to historical trends, following the rebound seen in July.
The Straits Times Index (STI) had a 3.35% month-on-month (m-o-m) rebound in July, in line with Yeo and Chua’s expectations. However, August has consistently been down m-o-m for
the STI in non-crisis years since 2010 with an average decline of 3.92% and a median decline of 3.2%. This is true regardless of US mid-term election years, including 2022, which tends to create a benign environment for US markets in the three months leading to it, say the analysts.
