Asian market preview 10/09/2008

US markets tumbled more than 2% last night on fresh concerns regarding Lehman Brothers that the company might not be able to find new investors to shore up its balance sheets. The pullback came a day after the biggest single-session rally in a month, after the government announced the takeover of Freddie Mac and Fannie Mae. Worries about the fate of Lehman Brothers sent its stocks down nearly 50% as talks with South Korea's KDB ended. Another bad news came from the pending US home sales report where the National Association of Realtors reported that its pending sales of existing homes fell 3.2% to 86.5 from 89.4 in June and missed a predicted reading of 88.6. Energy companies suffered yet again as oil fell $3.08 to settle at $103.26 per barrel as Hurricane Ike appeared to be heading away from installations in the Gulf. The Dow ended down by 280.01 pts or 2.43% to 11,230.73, S&P500 fell 43.28 pts or 3.41% to 1,224.51 while Nasdaq fell 59.95 pts or 2.64% to 2,209.81.

Asian markets may open lower again today as more worries from the US may spill over to the region. Yesterday, Asian markets were closed lower as profit taking dominated the market and more economic worries caused investors to seek safety. The economic doubts seem to become reality today as fears that another major bank may collapse in the US may trigger a selloff yet again. The continuing downfall in energy and commodity prices may help the market in long term as inflation eases but may hurt markets in short term as energy and commodity companies may lose market value. Oil was recently traded around $103.26ish per barrel, gold traded around $792ish and JPY traded around 107.08ish. Nikkei futures was closed at 12175 in CME last night compared to the close of 12455 for old contract and 12405 for new contract here yesterday.

Kospi may open lower again today following the end of the takeover talk by KDB for Lehman Brothers. Uncertainties about the fate of major US banks may spook investors as more economic worries may spread globally. The fall in oil prices may help stocks such as airlines and travels but it may not help too much as investors may seek safety after big gains on Monday. From technical point of view, Kospi still have room to fall after a gain of more than 5% on Monday and it needs to close the big gap formed that day. Kospi may find its support at 182ish and a very strong support at 180ish and its resistance at 187ish.

Hangseng may open lower yet again and may continue its path lower, closing the gap formed on Monday too. With more economic uncertainties from the US, investors in Hong Kong may not want to bet too heavily and may pull their winnings while they're still in the money right now. However, the continuing fall in oil prices may help curb the selloff and may give positive sentiment for the market in inflation terms. Chinese mainland market may yet again play a part in determining whether Hangseng may continue its downward path or it may recover slightly in 2nd session. Hangseng may find its support at 19800ish and its resistance at 20500ish today.