Asian market preview 20/02/2008

US markets ended the session lower last night after erasing early morning 150ish pts rally. Oil prices, which settled at record close above $100 is one of the main reason behind the drop as higher oil sparked inflation concerns. Telecom sector also led the market lower after AT&T and Verizon went into price wars and they projected lower profit because of it. Dow lost 10.99 pts or 0.09% to 12337.22, Nasdaq lost 15.60 pts or 0.67% to 2306.20 while S&P500 fell 1.21 pts or 0.09% to 1348.78.

Asian markets may start the day flat today following the slight retreat in Wall St overnight. Markets main driver today maybe energy producers after oil soared above $100 again since Jan 3 and was closed above $100 for first time. Speculation that OPEC may cut production has sparked the rally in oil prices and it caused oil to touch a record of $100.10 per barrel. Crude oil recently traded at $99.99 per barrel, gold at $927ish and JPY traded around 107.70ish. Nikkei futures settled at 13680 in CME, little change compared to the close of 13675 here yesterday.

Kospi may start the day flat with a downside bias today around 218ish. Stock may have high volatility again today as energy producers may drive market higher with record oil prices but inflation concerns with high oil prices may also push market lower. Investors may also take this chance for some profit taking in this time of uncertainties between inflation or recession after a nice rally for the past 2 days.

Hangseng may open flat today around 24100ish and may follow similar pattern as other markets with energy producers leading the market. Retailers and consumer products shares may turn lower as higher oil means higher spending and lower profit for these companies. Electronics shares may also fall after tech sector took a beating in the US overnight. Some profit taking may take place in Hong Kong today and this may cause another high volatility in the market. This is of course good news for us day traders.