Mild decline by US stocks overnight may mean cautious start for Singapore shares, according to Dow Jones.

STI’s recent attempts to clear 3,000 may be prolonged as index heavyweight DBS (D05.SG) may weigh given bank’s surprise 2Q10 $300 million loss due to $1.02 billion goodwill impairment charge taken for HK business; shares closed down 0.1% at $14.50.

Support for STI, which closed +0.4% at 2,997.65 yesterday, at 2,950, with any upside capped at year-to-date high of 3,037 set in April.

“We remain agnostic within the Singapore context about sector allocation, believing that stock selection on the basis of likely earnings or newsflow surprises to be the main driver of performance for now,” says JPMorgan, “Rotation among sectors will, we believe, be driven more by technical reasons and by excess liquidity chasing performance.”