Although some-market watchers have turned cautious on the local banks, signs are emerging that they may perform better than expected based on the US banks' results for the January to March quarter as the underpinnings are similar. United Overseas Bankreports its 1QFY2025 results on May 7, DBS Group Holdings reports on May 9 and Oversea-Chinese Banking Corp on May 9.

The US banks have reported better-than-expected earnings for the three months to March 31. The six of the biggest US banks - Morgan Stanley, JPMorgan Chase, Wells Fargo, Goldman Sachs, Bank of America and Citigroup - beat FactSet's Wall Street consensus expectations on the bottom-line, and only Wells Fargo missed on the top-line, according to Advisor Perspectives, a data analytics financial services platform.

Based on the results, the US banks reported strong net interest income due to relatively high interest rates, better equity trading revenues as a result of volatility and higher volumes of trading over the quarter. Morgan Stanley saw equity trading revenues soar 45% during the first quarter, JPMorgan set a record for equities trading revenue, and Goldman Sachs saw an increase of 27% for the metric.

Should the local banks follow suit, as the market's largest companies, they could propel the Straits Times Index (STI) higher, towards the psychological resistance of 4,000. The index ended the week of April 28-May 2 at 3,845. In doing so, the STI moved above the confluence of the 50- and 100-day moving averages, which are at 3,830 and 3,822 respectively. If the STI can stay above the levels of these two moving averages, the 3,822-3,830 level could become the new support.

Quarterly momentum appears poised to move above its resistance at the equilibrium line. Annual momentum is inching very gradually higher. These indicators are likely to support the STI's recovery.

Elsewhere, the Hang Seng Tech Index (5,244) has moved above a several-times tested resistance level at 5,064, and appears able to re-test its psychological resistance of 6,000. 2025's high was 6,195 before the Trump-induced volatility. Quarterly momentum had earlier found support at its equilibrium line and is now rebounding off this level, supporting the index's upmove.

The Hang Seng Tech Index is accessible on the Singapore Exchangevia its most liquid ETF the Lion-OCBC Securities Hang Seng Tech ETF or HSTECH.