Asian market preview 26/08/2008

US markets tumbled more than 240 points last night as financials drag on the overall market. The trading volume was light and that was part of the reason that the market fell steeply. AIG was the victim and was the steepest decliner among the Dow stocks after a Credit Suisse analyst cut its price target and forecast steep losses for third quarter. Adding to investors' concerns, Fitch Ratings warned late Friday that it might cut its ratings for AIG. Banks and other financial institutions also struggled in part because of a spike in the number of homeowners who have fallen behind on their mortgage payments. A report on Monday indicated that the number of unsold properties rose to an all-time high in July which caused investors to ignore the better-than-expected 3.1% increase in sales of existing homes. Crude prices rose 52 cents to settle at $115.11 after tropical storm Gustav formed in the Carribean. Trading volume was light and analysts expected this week to be more or less the same due to the lack of data. Investors are just too worried about the state of banks and financial institutions because of the prolonged credit crisis. The Dow ended down by 241.81 pts or 2.08% to 11,386.25, S&P500 fell 25.36 pts or 1.96% to 1,266.84 while Nasdaq fell 49.12 pts or 2.03% to 2,365.59.

Asian markets may open lower today after staging a big rally yesterday. More worries on the US' financial sector may drag the regional markets as foreigners may sell their stocks over in Asia. With more uncertainties for crude oil, there are more reasons for investors to sell and maybe have a profit taking session today. Oil was recently traded around $115.35ish per barrel, gold traded around $827.20ish and JPY traded around 109.26ish. Nikkei futures was closed at 12695 in CME compared to the close of 12870 here yesterday.

Kospi may open lower today after staging a moderate rebound yesterday due to the fall in oil prices and some good news on inflation problems in the US. However, as foreigners still selling off stocks, Kospi only rose marginally yesterday. Nervousness is still around for investors as the Korean Won fell to its weakest and government are trying to do something to prevent it to fall further. Exporters gets benefit on the falling Won but investors do not think the same way and Kospi is still being pressurised. Kospi may open around 191ish and may go further lower if investors decided to sell more stocks and if foreigners decided to sell their holdings. Kospi may have a strong support at around 190ish but if it breach that level, it may find its strong support at around 187-188ish region. Kospi may find its resistance at 193ish today.

Hangseng may open lower today following the weak close in Wall St after more worries regarding the financial sector in the US. A day after staging a 700 pts rally, investors over in Hong Kong may take a breather and decide to enjoy some profit in these uncertain times in the global market. Hangseng may open around 20900ish and may go down further if investors decided to selloff stocks while they're in the money. However, if optimism is shown from Chinese government with their stimulus package, there's a chance that Hangseng may get a rebound and rise further. With high volatility in the market, Hangseng may find its support at 20700ish today and may find its resistance at around 21200ish today.