Asian market preview 22/08/2008

US markets ended the session mixed last night after a huge jump in oil put some nervousness back into investors' minds. The positive news came from financial sector where analyst raised its ratings on Lehman Brothers Holdings Inc. to buy saying that the 4th biggest investment bank has become a hostile takeover candidate. That call helped ease concerns for investors and shrugged off most of the inflation fears caused by the spike in oil. Crude oil jumped $5.62 to settle at $121.18 per barrel amid rising tension between US and Russia and also the weakening US$ against major currencies. The rebound in oil prices helped energy companies such as Exxon and Chevron higher but weighed on such companies like United Airlines and Continental Airlines. Economic readings also showed some weakness but were ignored by investors. The Philly Fed said regional manufacturing activity was negative for 9th straight month. Investors were also ignoring the better-than-expected readings in unemployment from Labor Department. Report said that claims fell by 13,000 to 432,000 last week which was more than expected. The Dow ended a tick higher by 12.78 pts or 0.11% to 11,430.21, S&P500 rose 3.18 pts or 0.25% to 1,277.72 while Nasdaq fell 8.70 pts or 0.36% to 2,380.38.

Asian markets may have difficulties in today's trading with a sharp spike in oil prices indicated that inflationary pressure is creeping back in. The markets which have opened have indicated such pressure as they have all went lower just within 1 hour of trading. With higher oil prices and more worries over in the US financial sector, markets around the region may face more selling pressure and investors may also want to offload their stocks holdings as weekend is around the corner. Oil was recently traded around $121ish per barrel, gold traded around $835.80ish and JPY traded around 108.58ish. Nikkei have opened at 12750 and have ticked lower to reached its current low at 12625 and its current high at 12755. Nikkei was recently traded at 12680.

Kospi have also opened at the time of my writing. Kospi was opened at 194.65 and it went south after touching its current high of 194.70. Kospi have touched its lowest at 191.40 and was recently traded at around 192.15. Kospi may trade in this range for the rest of the day but there's also a chance that it might go lower further if investors are more nervous and if oil prices keep going up in Asian trading session. Kospi may find a strong support at 190ish and may find its resistance at 195 today.

Hangseng may open lower yet again today as a spike in oil prices means more inflationary pressure for the country and also for the greater China region. However, with Hangseng have been badly battered for the past few sessions, bargain hunters may kick in if the index have gone far too low. Hangseng may open around 20200ish and may go down further to test the 20000 level today. It may even break the 20000 level and may find its strong support at 19800ish today. Hangseng may find its resistance at 20500 today. China markets may play a big market if Hangseng should rebound or fall further.