Asian market preview 02/07/2008

US markets started the 2nd half with an erratic session but managed a modest gain last night after mixed news made it clear that the US is still in deep economic problems but may have some positive outlook. Markets started a bit higher but then plunged down, 150 pts for the Dow after oil touched new intraday high of above $143 per barrel. Mounting tensions in the Middle East and fear of supply shortage have caused oil to keep rising. The ISM report also showed a disappointment in manufacturing in June but it also showed strong exports for US factories. The piece of good news came from GM, while it reported a decline in sales, but it came in better than analysts' forecasts and GM beat Toyota in Detroit area gave a reason for investors to buy. Technical rebound also bound to happen after the markets have been sold off heavily in the past month. The Dow ended up by 32.25 pts or 0.28% to 11382.26, S&P500 rose 4.91 pts or 0.38% to 1284.91 while Nasdaq rose 11.99 or 0.52% to 2304.97.

Asian markets may start the day higher today following a slight upward momentum in the US markets last night. However, as we have seen the past few sessions, although markets may start higher in the morning, it seems that it can't hold onto its gains for the rest of the day due to the spiking oil prices and more uncertainties regarding the global economy. Oil was recently traded at around $141.69is per barrel, gold traded around $939ish and JPY traded around 106ish. Nikkei futures closed at 13475 in CME last night compared to the close of 13275 here yesterday.

Kospi may open higher again today at around 215-216ish but may not hang onto its gains as the market's still nervous regarding its inflation data and the central bank decision on rates. Trading is expected to be volatile like yesterday as investors may seek for bargain stocks but nervousness may cause investors to sell stocks.

Hangseng may open higher after its one day holiday yesterday at around 22100-22200ish today. However, with high oil and the pessimism in China mainland market, Hangseng may have a bumpy day today. Volatility may be high again with bargain hunters may stop Hangseng to fall too deep. Hangseng may find its support at around 21700 and its resistance at 22300 today.