Asian market preview 18/06/2008

US markets was closed down last night after a troubling reading on wholesale inflation and after Goldman Sachs said that banks will have to raise $65 billion in new capital to cover losses. The economic data showed that the steep run-up in energy costs is affecting businesses. The Labor Department said its index of producer prices jumped 1.4% in May and the core PPI rose by a mild 0.2%. Goldman Sachs however, posted a better-than-expected earnings but banking stocks tumbled after Goldman remained cautious about regional banks and said they needed to raise more money. The Government also reported a 3.3% decline in May home construction and a 1.3% dip in building permits, signs of persistent weakness in the struggling housing market. Another report also showed a 0.2% dip in industrial production in May, following a 0.7% decline in previous month. The Dow ended down by 108.78 pts or 0.89% to 12160.30, S&P500 fell 9.21 pts or 0.68% to 1350.93 while Nasdaq fell 17.05 pts or 0.69% to 2457.73.

Asian markets may open lower today following a quite bad US data which came out last night regarding inflation problems and also troubles in banking and housing sectors. The drop may be the catalyst for investors to get out of the market after having quite a good few sessions in the last few days and enjoy some profits. Oil prices dropped last night but was still in the high territory around $134ish per barrel. Banking sector maybe affected today and profit taking session may drive market lower further. Oil was recently traded around $133.40ish per barrel, gold traded around $881.50ish and JPY traded around 107.90ish. Nikkei futures closed at 14435 in CME compared to the close of 14450 here yesterday.

Kospi may start the day lower at around 223-224ish today and may continue lower on lower US markets overnight. Lower oil prices may limit the downward pressure for the market though but overall sentiment may still remains negative. The Kospi may find its support at 221ish and may find its resistance at 227ish today. With negative readings out in the US, investors may still sit on the sidelines and wait for better days to go into the market.

Hangseng may start the day lower today at around 23000ish and may find it hard for the market to go up further today. Investors may take the chance to have a profit taking session and it may drive the market lower further towards 22700ish today. Market may also still look at China markets for more direction as to where the market may be heading as the China markets are still pressurised by the inflation problems and there sesms to be no boost from the government. Hangseng may find its support at 22700ish and resistance at 23200ish today.