Asian market preview 25/08/2008

US markets were closed sharply higher on Friday to end a volatile week with just a slight loss as oil prices tumbled and after The Fed chairman Ben Bernanke said that inflation pressures are likely to moderate. Bernanke said that inflation pressures should moderate this year amid tepid economic growth and as commodity prices start to fall back. However, he added that inflation forecast remains "highly uncertain". Investors' mood were further lifted as crude oil plunged $6.59 per barrel to settle at $114.59 per barrel. Speculation surrounding Lehman Brothers Holdings Inc., saying that Korea Development Bank is considering buying the company, helped to give some hope for the financial sector and gave investors a reason to buy Lehman's stocks after the market sold off its stocks the day before. However, with light trading volumes, analysts' have said that the rally could not be fully used as an indicator that investors are confident enough to buy into the market. Remarks from Bernanke and Warren Buffet also indicated that Fannie Mae and Freddie Mac might be able to get by without a government bailout. The Dow finished the day up by 197.85 pts or 1.73% to 11,628.06, trimming the week's loss to 31.84 pts or 0.27%. S&P500 rose 14.48 pts or 1.13% to 1,292.20, trimming the week's loss to 6.00 pts or 0.46%. Nasdaq rose 34.33 pts or 1.14% to 2,414.71 but ended down for the week by 37.81 pts or 1.54%.

Asian markets may open higher today with the fall in oil and some boost regarding inflation pressure to ease over in the US. Another sharp drop in oil prices means that investors can have a breather and are able to ease some concerns regarding inflation around the region. M&A may also give some boost to some markets around the region today. However, with oil prices fell, it means that commodity prices may also fall along and may cause some problems for countries like Indonesia where its market is dominated by commodity related companies. Oil was recently traded around $114.36ish per barrel, gold traded around $821.85ish and JPY traded around 109.90ish. Nikkei futures was closed at 12905 in CME compared to the close of 12730 here on Friday.

Kospi may open higher today after being badly battered last week and have made a new year low at 190.40 on Friday. With oil prices falling back to the $114ish region, hopefully investors may get some confident to buy stocks back today. It was typical last week that Kospi opened a day higher but could not hold onto its gains for the rest of the day. Kospi may open around 195ish and may rise further if investors are confident enough. It may find its resistance at around 197ish and may find its support at 193ish today.

Hangseng may open higher today following the market's close on Friday due to hurricane warning. However, Hangseng have missed a sharp drop in the market along with regional sentiment on Friday. This may cause some slowdown in the rally today. With the Beijing Olympics finished over the weekend, hopefully this will bring investors attention back to the market and may cause them to buy stocks back today especially after oil prices are back to the $114 region. China markets may also play a part to determine how high Hangseng may rise today or where it will be capped for its gains. Hangseng have also made a new year low record of 20300 on Thursday. Hangseng may open around 20500ish and may rise further if investors decided to buy stocks now. Hangseng may find its resistance at 20800ish today and its support at 20300ish.