Asian market preview 20/08/2008

US markets were closed sharply lower for 2nd straight day last night on more economic concerns and financial worries. The Labor Department reported that Producer Price Index rose by 1.2% in July, more than double than expected and lifting the current annual rate to the highest in 27 years. Even after stripping food and energy costs, core prices rose by 0.7% which is higher than expected and biggest increase since November 2006. A slight increase in oil prices last night also made investors more nervous and decided that economic recovery is still quite far judging from the inflationary problems. More worries came from housing market as Commerce Department reported that July housing starts fell to an annual rate of 965,000 units, higher than analysts' expectation but still the lowest level in 17 years. Financial sector also took another hit as Lehman Brothers Holdings Inc. is expected that they will need to writedown another $4 billion in Q3 and also after Goldman Sachs analyst advised against buying AIG stocks. The Dow ended lower by 130.84 pts or 1.14% to 11,348.55, S&P500 fell 11.90 pts or 0.93% to 1,266.70 and Nasdaq fell 32.62 pts or 1.35% to 2,384.36

Asian stocks have opened lower at the time of me writing this preview following weak US markets close overnight. A slight rebound in oil does not seem to help the regional markets today and higher inflation in an economic slowdown over in the US caused more worries for investors. The prolonged credit crisis in the US have caused investors to refrain from buying stocks in recent days and caused low daily turnover around the region. Oil was currently traded around $115ish per barrel, gold traded around $815.65ish and JPY traded around 109.80ish. Nikkei have opened at 12715 and rebounded straight away and currently traded around 12830 with current high at 12840.

Kospi have started the day lower at 197.10 and it reached its highest first at 198.65 before it went back down to get to current low at 196.15. Recently, Kospi was traded at around 197.50ish. Kospi may trade within this range for the rest of the day but it may go and break its current high later on with 200 as its resistance.

Hangseng have started the day lower at 20319 and it reached as low as 20305 and rebounded. Recently Hangseng is traded around 20550 after reaching its current high of 20561. Hangseng may break its current high later on after being battered quite badly for the past few sessions. Hangseng may find its support at 20200ish and its resistance at around 20700ish depending on how the China mainland markets perform too.