Asian market preview 08/07/2008

US markets slipped yet again last night after opening stronger on the drop in oil prices. More concerns about financial sector as Freddie Mac and Fannie Mae were reported that they may need to raise more capital sent the Dow to its lowest since 2006 at one point. The $4 pullback in oil price did little to comfort the market as the high energy prices have 'destroyed' market confidence in the past few weeks. Comments from SF Fed, saying that the financial markets remained fragile and it will take time for conditions to improve but things could get worse before they get better, also added to markets' concerns and nervousness. Ahead of the earnings season, financial sector once again dragged down the market with banking stocks fell more than 2% each. The Dow fell 56.58 pts or 0.5% to 11231.96. It went as high as 11399ish and as low as 11120ish during the day. S&P500 fell 10.59 pts or 0.84% to 1252.31 and Nasdaq fell 2.06 pts or 0.09% to 2243.32.

Asian markets may be in dilemma today after staging a rebound yesterday. Lower oil prices and other commodities such as metals may drive that sector lower today, but with the prospect of good earnings ahead of the earnings season, markets may continue to rally following yesterday's. Financial sector may yet again be boosted on prospect that bank will post huge profits last quarter. However, nervousness may still be in the air ahead of the US earnings season and the grim outlook of the earnings for US companies. Oil was recently traded around $141.40ish, gold traded around $923.90ish and JPY traded around 107.05ish. Nikkei futures was closed at 13400 in CME compared to the close of 13365 here yesterday.

Kospi may open the day lower yet again after staging a mild rebound yesterday. Concerns over inflation may still hurt investors' confidence but the pullback in oil prices may boost the market a little. Volatility may be high yet again as Kospi approaching its lowest point since March with bargain hunters may start kicking in as they judge the stocks prices are quite cheap in valuation right now. Kospi may find its support at 200 and its resistance at around 205.

Hangseng may start the day lower after US markets fell again last night. However, strong market sentiment from mainland China over optimism on financial sector may boost Hangseng yet again. China rebounded almost 5% yesterday and Hangseng rebounded more than 2%. If China market continue to rally today, Hangseng may follow. However with earnings season to kick off in the US later on tonight, investors may want to wait and see how the US economy is faring. Hangseng may find its support at 21500 and its resistance at 22200ish today.