Asian market preview 27/08/2008

US stocks ended mixed in light trading last night as concerns about the path of hurricane Gustav sent oil prices higher and offset a better-than-expected reading on consumer confidence. Comments from The Fed regarding the country's high inflation also added to market's uneasiness. The Fed's minutes from Aug. 5 meeting showed that they are concerned about creeping inflation and it would need to raise interest rates to curb inflation. However, analysts believe that The Fed are more concerned about the slowing growth and it would need a significant jump in gas prices for The Fed to start raising interest rates, which they believe to be quite some time. The Conference Board reported that its consumer confidence index rose to 56.9 from a revised 51.9 in July. Analysts have expected a reading of 53 which marked a second month of improvement in sentiment, after a six-month slide since January. Another good news came from Commerce Department where it reported that new home sales rose 2.4% in July while analysts have expected a drop in sales. However, despite all these good news, the markets are more concerned that Hurricane Gustav would hit installations in the Gulf of Mexico in the coming days which sent energy prices higher. Crude oil rose $1.16 to settle at $116.27 per barrel. Volatility is quite high but trading volume remains light last night as investors are usually take the last week of the summer off. The Dow ended slightly higher by 26.62 pts or 0.23% to 11,412.87, S&P500 rose 4.67 pts or 0.37% to 1,271.51 while Nasdaq fell 3.62 pts or 0.15% to 2,361.97.

Asian markets may open flat with a slightly upward bias following US markets' mixed close last night. Higher energy prices may weigh slightly on the markets but with dollar gained strength against major currencies, exporters may get a boost. The positive news from the US which came out last night may help regional markets slightly too but as there are not many news from The US, markets may have to rely locally for directions. Markets dominated by commodity related companies such as Indonesia may rise today with the rising energy prices. Crude oil was recently traded at around $116.20ish per barrel, gold traded around $287.10ish and JPY traded around 109.62ish. Nikkei futures was closed at 12815 in CME compared to the close of 12780 here yesterday.

Kospi may open around yesterday's close but with slightly upward bias today. Positive news from The US may give some reasons for investors to buy into stocks today after the market fell yesterday and after just a slight increase on Monday. However, with oil prices back above $116 per barrel, investors may still be quite nervous as high energy prices means inflation problem is creeping back in. Bargain hunters may find their way to buy stocks though as the market have been battered quite badly and it is currently near this year's lowest points. Kospi may find its support at 190ish and its resistance at 196ish today.

Hangseng may open slightly higher today following yesterday's selloff after it rose sharply on Monday. With a huge drop on Wall St on Monday night, the slight drop in Hangseng yesterday indicated that market sentiment is still quite good for Hangseng and that it may rise further today. Bargain hunters may kick in to buy stocks but oil sensitive stocks may be dragging the overall market today. China mainland markets may also play a part to determine whether Hangseng will rise more or it will go back down. Hangseng may open at around 21120ish and it may find its support at 20800 and its resistance at 21300ish today.