Asian market preview 11/08/2008

US markets were closed sharply higher on Friday to end the highly volatile week on a high note. Another sharp drop in oil prices as dollar gained grounds against Euro sparked a buying frenzy by investors and set aside more financial worries generated by the 3x larger-than-expected loss at Fannie Mae. Oil prices dropped $4.82 per barrel to settle at $115.20 which brought crude's decline over the past 4 weeks to more than $30 per barrel. Investors saw good sign along with the drop in oil prices as cheaper oil means consumer can spend more freely. In a disturbing financial news, Fannie Mae reported a loss of $2.3 billion or $2.54 a share compared to the predicted 68 cents a share. The company also said it would cut its dividend to 5 cents from 35 cents. In this kind of market condition, investors would buy anything with positive news and sell anything when negative news came along. The Dow ended up by 302.89 pts or 2.65% to 11,734.32 and rose 3.6% for the week. S&P500 rose 30.25 pts or 2.39% to 1,296.32 and rose 2.9% for the week. Nasdaq climbed 58.37 pts or 2.48% to 2,414.10 and jumped 4.5% for the week.

Asian markets may open higher today following the strong close on Wall St on Friday. Investors around the region may finally find more optimism and reasons to buy into stocks with oil prices keep dropping to $115 level per barrel. Inflationary pressure also drops along with oil prices. However, more financial worries from the US may still weigh on the markets. Oil was recently traded at $115.95 per barrel, gold traded around $860.35 and JPY traded around $110ish. Nikkei futures was closed at 13300 in CME on Friday compared to the close of 13170 here on Friday.

Kospi may open higher today following the huge gains on Wall St on Friday. Investors may start to buy into stocks again as oil prices declined to $115ish per barrel. Kospi may go towards 205ish today if investors are confident enough and may even go higher. However, if nervousness regarding US financial sector still outweigh even the sharp drop in oil, the market may pull back again. Market may have a volatile session with optimists still fight against the skeptics.

Hangseng may open higher today at around 21900-22000ish today and may go even higher as investors gains more confidence with the sharp drop in commodities prices. However, China markets may play another big part here again as it did on Friday where China markets plunged almost 5%. Hangseng may have a volatile session today with bargain hunters may come in and buy cheap stocks. Hangseng may find its support at 21800 and its resistance at 22300ish today.