Dear readers, some readers have been asking for my take on the Straits Times Index (STI) amidst the renewed volatilities seen in the US, Singapore and other stocks markets. So, I thought I may as well devote this post to discussing about the direction of the Straits Times Index today, with a view that the Straits Times Index is a benchmark indicator of Singapore stocks.
First, the Singapore Straits Times Index closed at 2,485.71 yesterday. As a quick recap of my posts in recent months: I have been sharing how the 2,500 level of the Straits Times Index is a near-term support and I was indeed correct as shown in the performance of the Straits Times Index in recent months.
Next, I would like to reiterate what I have been sharing thus far of the next support level of the STI. I set the target of the STI at 2,000 in a scenario of financial markets meltdown. This translates in today’s term of an about 20% correction in the STI level.
To me, this 20% correction is possible given the bearish economies and the still ongoing Covid-19. I really believe the realities of the current economic situation has not caught up with the stocks markets. Part of the reason is due to investors still being drawn to the stocks markets for higher yields, hence driving up stock prices since the overall interest rate environment is very low.
Just take a look at DBS stock price, at yesterday’s closing price of $19.99, I don’t think this price is a price that is reflective of the current economical environment. Hence, I am of the view that there is scope to head south further for DBS stocks price. And since DBS stock is a major constituent of the Straits Times Index, the southing of the index is further catalysed.
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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