Asian market preview 24/07/2008

US markets were closed stronger again last night following the drop in oil to below $125 per barrel. Fannie Mae and Freddie Mac's rescue plan by the government also boosted up investors' confidence and helped the financial sector to rally further last night. Good earnings reports from AT&T and Pfizer Inc. addded more reasons for investors to buy stocks and helped make market recovery and lifted it from bear market territory. Stocks have been battered in the past few weeks, so any piece of good news will spark strong buying into that company and the whole sector. Oil prices fell 3.1% to $124.44 per barrel, dropping below $125 for the first time in six weeks, after reports saying that fuel stockpiles increased as consumption fell to the lowest in a year. Dollar rally against major currencies also pushed commodities prices lower. Investors still feared of more bad earnings to come but if oil keep sliding down further, earnings report will be secondary as investors will find more confidence with the drop in oil, earnings will improve in next quarter. The Dow rose 29.88 pts or 0.3% to 11,632.38, S&P500 rose 5.19 pts or 0.4% to 1,282.19 while Nasdaq rose 21.92 pts or 1% to 2,325.88.

Asian markets may open higher today and extend their rallies from yesterday with more positive news coming out of the US and the US markets are able to extend their rally on lower oil. More earnings optimism from the US may help extend the rally further in Asia markets too as investors might see that earnings are not as bad as what they've been anticipating in recent weeks. Oil producers may be hurting as oil prices dropped more than $20 since last week but general market sentiment may be positive with less inflationary concerns. Oil was recently traded around $124.46ish per barrel, gold traded around $920.75ish and JPY traded around 107.90ish. Nikkei futures was closed at 13500 in CME compared to the close of 13425 here yesterday.

Kospi may open higher today and may extend yesterday's rally following another steep drop in oil prices and also better-than-expected earnings season that continues in the US. Investors may gain more confidence with the overall global economy as some analysts even suggested that markets may have reached its bottom. Kospi may even try the 210 level today if investors are confident enough and may go beyond that too as stocks have been battered so bad that these times can be counted as bargain hunting session.

Hangseng may open higher at around 23400ish and may rally further if investors are confident enough to buy more into stocks as oil prices decline further. More earnings optimism from China mainland and also from Hongkong itself may help boost investors to buy more stocks. Sinopec and PetroChina may rally further while CNOOC may go down as oil prices slide to below $125 per barrel. Hangseng may find its resistance at 23700 today and its support at around 23200 region.