Asian market preview 26/05/2008

US markets tumbled again on Friday to finish the week lower by at least 3% for each of the major indices. The main concern posted by investors is the ever rising oil prices which may affect consumer spending in upcoming days and months. As the summer holidays kick in, people are expected to drive more and therefore they need more gasoline to fuel their vehicles. Housing also posted a concern after sales of previously owned homes matched an all time low in April. Analysts start to think that the recent 2 months of gains from markets' lowest point may have come a little bit premature and that now, investors are starting to realize that the economy recovery is not as easy as it seems. With high oil prices as the main concern, The Fed may not cut anymore rates in the coming months and some investors have started expecting that The Fed will raise rates in October. The Dow finished Friday's session lower by 145.99 pts or 1.16% to 12479.63 and it declined 3.91% for the week. S&P500 fell 18.42 pts or 1.32% to 1375.93 and declined 3.47% for the week. Nasdaq fell 19.91 pts or 0.81% to 2444.67 and declined 3.33% for the week.

Asian markets may start the day lower today following the weak close on Wall St on Friday and also the high oil price may posted more concerns for the inflationary state of the countries in the region. WIth the US long weekend, trading volume may be expected to be thin today as investors may want to stay on the sidelines amid the uncertainties of the global economy. Oil was settled at $132.19 per barrel on Friday and was recently traded around $131.67ish per barrrel, gold traded around $923.10ish and JPY traded around 103.40ish. Nikkei futures closed at 13860 in CME compared to the close of 13940 here on Friday.

Kospi may start the day lower again today following the decline on Friday and also the decline in Wall St due to inflation concerns. It may open around 233ish and may go as low as 231ish today if the negative sentiment pushed investors to sell and investors think that the recent 2 months gains is over. However, with finance companies keep buy rating for Kospi, the downside maybe limited and that utilities and tech sector may help support the market.

Hangseng may start the day lower following regional and US cues on Friday. It may open around 24400ish and may even go towards 24000ish if consumer sentiment remains weak. Chinese mainland markets may still have a significant impact on Hangseng and it seems that the quake in Sichuan is far from finishsed and may have more negative impact on the market. For futures market, the strong support is at 24000 and if the market decided to recover, it may find its first resistance at 24800 today.