Asian market preview 30/04/2008

US markets fell mildly overnight after a lower-than-expected reading on the consumer confidence released by the Conference Board. Consumer confidence dropped to 62.3 from 65.9 a month before. Housing price also continue to slide this month and analysts believe that prices will continue to slide until the end of next year. Oil, gold and copper prices also tumbled the most in 5 weeks overnight and these also cause market to go lower. However, with all the negative economic news, markets are unexpectedly calm and they did not go into panic mode. Investors believe that the worst is over and they're waiting anxiously about what The Fed might do at the end of their 2-day meeting today. Lower commodity prices is one of the reason markets did not tumble too deep. The Dow ended lower by 39.81 pts or 0.31% to 12831.94 with Merck as the biggest drag, declining $4.30 or 10.4% to $37.14 after Food and Drug Administration refused to approve new cholestrol drug. S&P500 fell 5.43 pts or 0.39% to 1390.94 while Nasdaq rose 1.70 pts or 0.07% to 2426.10

Asian markets may open quite flat with downside bias today following the weak close in the US and ahead of The Fed's rate decision. Profit taking may take place today as investors do not want to bet too much before The Fed's decision and also ahead of more economic news from the US such as Q1 GDP. Mining companies may be the biggest drag today with metal prices dipped quite a lot overnight and oil producers also may decline today with oil prices tumbled more than $3. Crude oil was recently traded around $115.60ish per barrel, gold traded at $871.30ish and JPY traded at around 104ish. Nikkei futures closed at 13890 at CME compared to the close of 13965 here on Monday.

Kospi may open lower around 234 and may extend its decline from yesterday ahead of The Fed's rate decision today. Mining and oil producers may lead the decline as prices tumbled overnight. Market volatility may be high as investors may try to take profit ahead of the national holiday on Thursday. However, market may not go down too deep as lower commodity prices also bring some calm to the inflationary condition in the country.

With Hangseng's old contract expired yesterday, a new Hangseng contract may open around 25700ish with a downside bias today tracking the weak US markets. However, with good earnings season from China, it's also possible for Hangseng to rise and go beyond 26000 today. Banking and financial sectors maybe in focus again with ICBC posting a 77% jump in profit. Volatility may be high today with investors may want to take profit ahead of The Fed's rate decision and also a national holiday on Thursday.