Asian market preview 07/08/2008

US markets were closed stronger overnight after posting big gains the day before. The continuing drop in oil prices gave investors more confidence that recession can be avoided and economic recovery is on course. Earlier in the session, investors have become nervous once again after Freddie Mac reported larger-than-expected Q2 loss but investors gained more confidence after government reported a jump in domestic oil inventories which caused oil price to slide 59 cents to settle at $118.58 per barrel. Oil price have almost fell $30 per barrel since reaching its peak of $147.27 on July 11. The better-than-expected earnings for Cisco Systems also helped markets to get more investors' confidence to buy into tech stocks while financials remained a weak spot. The Dow ended up by 40.30 pts or 0.35% to 11,656.07, S&P500 rose 4.31 pts or 0.34% to 1,289.19 while Nasdaq rose 28.54 pts or 1.21% to 2,378.37.

Asian markets may open higher today and may extend yesterday's rally after oil prices slid further last night, easing inflationary concerns around the region. Many analysts said that oil prices decline at just the right time which may help to boost global markets and prevent the markets to go deeper into recession. The strength in dollar also may boost exporters today. Tech stocks which were boosted in the US markets, may also be boosted around the region especially in Japan and South Korea. Oil was recently traded around $118.50ish per barrel, gold traded around $879.40ish and JPY traded around 109.60ish. Nikkei futures was closed at 13290 in CME compared to the close of 13210 here yesterday.

Kospi may open higher today at around 205ish today and may extend its gains from yesterday should investors have become more confident to invest in stocks with the rapid decline in oil. However, with financial sector still worrisome in the US, investors might still have some doubts if this rally could actually last. In the short term, markets may become optimistic and investors may have enough confidence to buy into stocks.

Hangseng may open higher today and may play catch up with the rest of the region after the market was closed yesterday as the country was in danger with tropical storm approaching. Hangseng may open around 22300ish and may rise further towards 22700. If investors are optimistic enough, it may even try to get to 23000 mark as other region have posted big gains yesterday. China mainland market may play a part too in boosting Hangseng today. With olympic games approaching in 2 days time, China may be boosted further and with oil prices keep declining, investors may get more confidence to buy into stock markets.