Asian market preview 15/02/2008

The US markets dropped for the first time this week last night following Bernanke's testimony regarding the deterioriating economy. He mentioned that the problems caused by subprime mortgages may spread to other areas besides financial sector and that it would cause problems as companies may cut more jobs, which caused higher jobless rate and that means that lower consumer spending. After 3 straight days of gains, the markets are not ready to be given comments such as this which was so disheartening and caused investors to cash in on their profits. Dow lost 175.26 pts or 1.4% to 12376.98, S&P500 fell 18.35 pts or 1.34% to 1348.86 while Nasdaq fell 41.39 pts or 1.74% to 2332.54. On a positive note, the Fed signaled that they're ready to cut rates further to prevent the economy to deteriorate more. However, rate adjustments usually take effect in 6-9 months from its implementation.

Asian markets may open lower today after the comments' made by the Fed's chairman last night which caused investors in the US to sell off their stocks. Another factor is today, being a Friday, investors in Asia may also cash in on their profits following the sharp gains in most Asian markets yesterday. Crude oil rose $2 to trade recently around $95.20ish while gold fell to around $908ish and JPY traded around 107.80ish. Nikkei futures closed in CME at 13480 which was lower compared to the close of 13610 here yesterday.

Kospi may open lower following yesterday's sharp gains and may open around 214ish. Investor may do some profit taking should they treat Bernanke's comments as an early warning sign that more rollercoaster ride is in sight for the market. Should the panic spread faster than expected, it is possible that Kospi may even fell to below 210ish.

Hangseng may open lower around 23600ish today after less-than-positive comments came out of the US signaling that the world's biggest economy is faltering more and more and it may spread across the globe. The already nervous investors attitude will be tested to the limit and they may not like this kind of thing after a huge rally made by the market yesterday.