Asian market preview 18/07/2008

US markets surged for 2nd day last night as investors received double dose of good news in form of falling energy prices and good earnings report from big companies like JPMorgan Chase and United Technologies. Oil prices dropped for 3rd day in a row and was settled at $129.29, bringing the 3 day decline of more than $15 per barrel. JPMorgan Chase reported a better-than-expected earnings, although still reporting a loss in Q2 but it was better than what analysts' expected. The upbeat earnings report, the drop in oil helped the market to stage another rally and the battered financial sector was leading the way yet again. On other news, commerce dept reported construction of home and apartments rose 9.1% in June but construction for single-family home fell by 5.3% to the slowest pace in 17 years. Labor Department reported that the number of new people seeking unemployment benefits rose by 18,000 last week to 366,000 but the number was well below analysts' expectations. The Dow ended the day higher by 207.38 pts or 1.85% to 11,446.66, S&P500 rose 14.96 pts or 1.2% to 1,260.32 while Nasdaq rose 27.45 pts or 1.2% to 2,312.30. However, it seemed that the 2-day big rally maybe short-lived as Google, Merril Lynch and Microsoft reported earnings that missed analysts' forecast after hours.

Asian markets may open higher again today as oil prices tumbled for 3rd consecutive day, easing inflationary concerns. The surge in US markets may also help markets sentiment around the region today as investors may continue to collect stocks at bargain prices. However, gains around the region may be limited as fears are still there in the US' economic stability and corporate giants like Merril have started to miss earnings estimate. Oil was recently traded around $129ish per barrel, gold traded around $959ish and JPY traded around 106.20ish. Nikkei futures was closed at 13185 in CME last night compared to the close of 13015 here yesterday.

Kospi may start the day higher again today and may test the 200 mark after upbeat earnings lifted US markets overnight. With oil prices tumbled to below $130 per barrel, investors may be in buying mood again and may start collecting stocks again. However, with earnings season just started, investors may still remain cautious especially after Merril, Google and Microsoft reported earnings that missed estimates in after hours trading in the US. If Kospi is able to go beyond 200, it may test the 202ish region and may find its support at 195 today.

Hangseng may start the day higher again today after unexpected good earnings lifted the US markets yet again last night. The drop in oil prices may also helped investors' mood today. However, after-hours result which reported that Merril, Google and Microsoft missed estimates may weigh on the market today. China mainland market may also play a part after they reported slower growth but inflationary pressure is stil high. Hangseng may find its resistance at 22200 today and may find its support at around 21500 today.