Asian market preview 09/07/2008

US markets closed sharply higher last night as oil fell for 2nd straight day, bringing the drop to $9. Oil dropped more than $5 last night to close at $136.04 per barrel. The market was relieved to know that The Fed might extend its lending efforts to investment banks and that boosted government-backed lenders Fannie Mae and Freddie Mac to rebound from previous day's steep losses. Meanwhile, National Association of Realtors reported on Tuesday that pending sales of US homes fell by 4.7% in May from previous month. However, all the optimism from the drop in oil and other commodity prices, the prospect of lenders to raise fresh capital have all helped the US markets to rally and leave the Dow 19.6% off from record high. More optimism is going to be shown on Wednesday as Alcoa kicks off the earnings season with results beating expectation. The Dow rose 152.25 or 1.36% to 11383.21, S&P500 rose 21.39 pts or 1.71% to 1273.70 while Nasdaq rose 51.10 pts or 2.28% to 2294.42.

Asian markets are set for a rebound today at the open following US markets sharp rally and the sharp fall in energy prices and other commodity such as corn. The sharp fall around the region yesterday may help the rebound today as bargain hunting may kick in after benchmark around Asia touched its lowest level since March. The drop in oil prices may help stocks at general but may drag down oil producers and also other commodity related stocks. Oil was recently traded around $135.90ish, gold traded around $917.15ish and JPY traded around 107.40ish. Nikkei futures was closed at 13300 in CME compared to the close of 13030 here yesterday.

Kospi may open higher today and may finally get its long-awaited rebound today following the losses it suffered for the past 2 weeks, leading it to its lowest level since March. Kospi may open above the 200 mark today and may extend its rally towards 205 today with optimism finally showing in the US and government's intervention in preventing the Won to fall further. BoK is doing whatever they can to curb inflation without raising interest rate and investors may get more confident today as stocks are considered to be a bargain at these levels.

Hangseng may open higher today following a steep loss yesterday. It may even go back towards the 21800 level again today or may even try to break the 22000 level if China markets are continuing its rebound today. Bargain hunters may help the market to stage its rebound and with oil back to around $135 level, oil refiners giants such as Sinopec and Petrochina may lead Hangseng higher. Financial sector may also lead the rebound here today with more banks posted optimism in their Q2 earnings. Hangseng may find its support at 21000 and its resistance at 22000 today.