Asian market preview 16/09/2008

US markets tumbled the most since 2001's terrorist attacks last night, losing more than 500 pts as investors recoiled as Lehman Brothers Inc. filed for bankcruptcy and after a forced sale of Merril Lynch to Bank of America. While the 2 companies have reached some kind of resolution, investors are now focused on other financial institutions such as AIG, which is seeking funding to shore up its balance sheet. The Fed is urging other financial giants such as Goldman Sachs and JPMorgan to raise money of up to $75 billion to help AIG. Investors have become scared and panic selling was seen across the markets in the US as the stability of the financial systems is being questioned. Investors are also waiting for The Fed's decision on interest rates which is due later on tonight and investors are expecting that The Fed might show some signs that they're ready to cut rates further. On the commodity sector, oil also tumbled $5.47 to $95.71 per barrel on renewed concerns that the demand is slowing significantly. The Dow plunged 504.48 pts or 4.42% to 10,917.51, S&P500 fell 59.00 pts or 4.71% to 1,192.70 while Nasdaq fell 81.36 pts or 3.60% to 2,179.91.

Asian markets are bracing for hefty losses today following the bankcruptcy of Lehman Brothers and after Merril Lynch was swallowed by Bank of America. The troubles in AIG may also add to the worry for investors here as a lot of banks and institutions are exposed to AIG and also Lehman Brothers. The tumble in commodity sector may also hurt commodity players here in Asia and countries like Indonesia may suffer further as its market is being driven by commodity-related companies. With major Asian merkets closed yesterday, they may play catch up to Wall St and may suffer more losses. Oil was recently traded around $94.27ish per barrel, gold traded around $790.50ish and JPY traded around 104.22ish. Nikkei futures was closed at 11740 in CNE compared to the close of 12220 here on Friday.

Kospi may open lower today and may test this year's low on Lehman's demise. The exposure on Lehman Brothers for Korean banks also may weigh on the market today. Losses may be accelerated if investors decided to take their money off stocks on worries that the financial system in the US may be unstable and may spread off to the rest of the world.

Hangseng may open lower today following other markets as Lehman Brothers filed for bankcruptcy and also more worries for AIG. The tumble in commodity prices may also weigh on commodity producers in Hong Kong such as Sinopec and CNOOC. The only consolation found in today's market may be the interest rate cut by the PBOC in China. Hangseng may find its support at 18000 and its resistance at 18700 today.