Asian market preview 29/07/2008

US markets were closed sharply lower last night as investors again become anxious regarding the financial sector. Financials, which had rallied in the past few weeks, suffered the same worries about souring debts and Wall St is concerned that further withering of housing and credit markets will damage banks' balance sheets. An IMF report also added some stress to the market as they predicted continuing problems in the credit and housing markets will continue to hurt the financial industry. The IMF also said that at the moment, a bottom for housing market is not visible. The closing of branches of the 1st National Bank of Nevada and First Heritage Bank N.A. by federal officials on Friday also adds worries for investors about the ability of some banks to stay afloat. Upcoming economic data that will be important to take note of are the first report on gross domestic product for Q2 to come out on Thursday which was predicted to rise. Employment report for June to come out on Friday and regarded as the most important economic readings of the month because of the insight into the well-being of the consumer. Unemployment is expected to rise too. The Dow plunged 239.61 pts or 2.11% to 11,131.08 and was back into bear market territory. S&P500 fell 23.29 pts or 1.86% to 1,234.37 while Nasdaq fell 46.31 pts or 2% to 2,264.22.

Asian markets may open lower yet again today and may slide further as more worries from the US markets may spill over and caused investors fears and run for safety. Oil prices rebounded last night and that may also adds more reasons for investors to selloff stocks. Investors are fearing that the slowdown in the US' economy and 'meltdown' for US banks may caused problems on the world scale. However, for countries like Indonesia, I think they are not too affected by the US as the market there are dominated by commodities. Oil was recently traded around $125ish per barrel, gold traded around $931.10ish and JPY traded around 107.45ish. Nikkei was closed at 13350 here yesterday.

Kospi may open lower today at around 204ish and may slide further as investors are becoming nervous regarding the well being of the global economy. In recent days, Kospi also find it hard to get momentum back to rally after the country reported higher GDP and higher inflation risk. It may go towards the 200 level today if investors are finding no reason to buy into stocks.

Hangseng may open lower today at around 22400ish and may slide further on fears that problems in the US are far from over and may spill over to the Asia region. However, with China's government showing that they will ease monetary tightening, selling pressure maybe reduced in Hong Kong and China markets may play a part to limit the downside pressure in the Hangseng market. Hangseng may find its support at 22000 today and its resistance at 22700.