Asian market preview 31/07/2008

US markets closed sharply higher last night in a volatile trade as markets did a late rally near the closing bell. The rebound in financial sector and optimism about private job sector led the rally as bank and brokerages, many trading at multiyear lows, led the late advance. There was some relief in the market after The Fed said it would extend and expand its program to lend money to investment banks which reassured the market that banks would have cash if needed. Investors have been worried that some of Wall St's biggest names may need more capital after Merril Lynch & Co. unexpectedly announced a $5.7 billion writedown on Monday. Earlier, Automatic Data Processing said private sector employment rose by 9,000 this month and that data cheered Wall St and offset a big spike in oil prices where oil rose $4.58 to settle at $126.77. The Dow ended up by 186.13 or 1.63% to 11,583.69, S&P500 rose 21.06 pts or 1.67% to 1,284.26 while Nasdaq rose 10.10 pts or 0.44% to 2,329.72.

Asian markets may open higher today and may continue yesterday's rally on optimism that US banks will have financial aid from The Fed if needed and after US markets' strong close for 2nd straight day last night. The spike in oil prices may cause markets around the region to fluctuate but overall sentiment may stay positive for the rest of the day. Dollar gained strength against major currencies and that will help exporters around the region too. Oil was recently traded around $126.74ish per barrel, gold traded around $906.30ish and JPY traded around 108.10ish. Nikkei futures was closed at 13470 in CME compared to the close of 13400 here yesterday.

Kospi may open higher today and may get stronger rally than yesterday after optimism from the US markets may help investors confidence in South Korea. The spike in oil prices may drag the market a bit but overall sentiment may stay positive after US markets closed sharply higher for 2 days in a row. Kospi may open up around 206ish and may have its resistance around 208ish and its support around 204ish.

Hangseng may open higher again today and I'll be talking about Hangseng new contract here. Since the new contract ended at 22797 yesterday, it may open up around 22900ish today and may try to breach the 23000 level today should investors get confident enough. The spike in oil may drag refiners stocks such as Sinpoec and PetroChina but may boost the biggest offshore producers CNOOC. China mainland markets may also determine the overall direction for Hangseng market today. Hangseng may find its resistance at 23200 and its support at 22700 today.