Asian market preview 29/08/2008

US markets were closed sharply higher last night on better-than-expected GDP, a drop in jobless claims and also a decline in oil prices. The Commerce Department reported that GDP rose at an annual rate of 3.3% for the April-June period which gave investors some new optimism as it was better than government's initial estimate of 1.9% and economists' forecast of 2.7%. The good GDP number gave investors reassurance that the economy is holding up and it marked the economy's best performance since Q3 last year when GDP rose 4.8%. The Labor Department also reported that jobless claims dropped to 425,000 down 10,000 from the previous week and was better than the 427,000 expected by analysts. Oil prices rose initially on fears that tropical storm Gustav will hit installations in The Gulf of Mexico but the strengthening dollar helped curb those gains and caused oil prices to drop. Crude oil fell $2.56 to settle at $115.59 per barrel. Trading volume was light again last night ahead of the long Labor Day weekend in US. The Dow rose 212.67 pts or 1.85% to 11,715.18, S&P500 rose 19.02 pts or 1.48% to 1,300.68 while Nasdaq rose 29.18 pts or 1.22% to 2,411.64. Dell Computers reported Q2 profit that fell short of analysts' estimates and shares tumbled after hours.

Asian markets may open higher today following the strong close on Wall St caused by new-found optimism with the better GDP number. Lower oil prices may also help Asian markets today following the drop around the region yesterday. Foreigners may still play a big part in many Asian countries and they may determine whether they're going to boost the Asian markets now. However, with today being a Friday, gains may also be limited going towards the weekend as investors may not want to risk it in the uncertain times. Oil was recently traded around 116.49ish per barrel and it may rise again in the weekend as Gustav creeps in. Gold was recently traded around $838.80ish and JPY traded around 109.43ish. Nikkei futures was closed at 13005 in CME last night compared to the close of 12790 here yesterday.

Kospi may open higher today following the sharp drop yesterday and was closed near this year's lowest point. Stocks may rebound today as bargain hunters may kick in and also after the US markets showed more strength than expected. The slightly lower oil prices may also help investors to find reasons to buy into stocks. Kospi may open around 192-193ish and may rise further towards 195ish. However, if foreigners keep selling off their stocks, Kospi may not hold that for long and it may go back down. Volatility may be high as bargain hunters and sellers try to reign the market. Kospi may find its resistance at 195 and its support at 190 today.

Hangseng may open higher today after being battered badly yesterday following some downgrades for some heavyweights in the market. Good earnings doesn't mean that companies can have a nice rally as downgrades from financial institutions made investors selloff stocks while they're still in the money. However, Hangseng may rebound today as US economy showed positive signs and also strong market close for the US proved that investors in the US are still quite optimistic. However, gains may also be limited ahead of the weekend today. Hangseng may open around 21200ish and may rise further towards 21500ish today. Hangseng may find its resistance at 21500 and its support at 21800 today.