STI +2.5%; 2945 Cap; Bias Toward Downside - DBSV

Singapore blue chips sharply higher, drawing strength from rally in Hong Kong market (HSI last +3.2%), propelling STI past 2900 for 1st time since July 14. Index +2.5% at 2917.69 midday, with 28 out of 30 components up, Thai Beverage (Y92.SG) unchanged at S$0.225, Starhub (CC3.SG) down 1.1% at S$2.80. STI's resistance expected at 2945, based on 38.2% Fibonacci retracement of rise to May high of 3269 from 2008 low of 2745. Despite gains, DBS Vickers says STI still biased down; "while the pullback in oil and commodities prices bode well for equities, uncertainties surrounding the earnings season and concerns about a slowdown in economic growth continue to weigh down on stocks." FTSE ST All Share Index +2.1% at 729.79. Overall volume slightly more than half of Friday's total of 1.05 billion shares.