Asian market preview 18/09/2008

US markets tumbled yet again last night, with Dow sank more than 450 pts on concerns that more financial institutions may be in trouble. Investors' confidence were hit hard and The Fed's action to rescue AIG was seen as not so positive move after all. Investors thought that with The Fed lending $85 billion to AIG, it means that no other independent companies that can come up with that much amount of cash to help bailout the insurance giant. Trust is also becoming an issue on Wall St last night as AIG used to say that they are OK along with anybody else and now one by one, the financial institutions start to collapse. Commodity sector became a target for safe-haven buying as investors divert their money to oil, gold and short-term treasurys. Gold rose as much as $90.40 or 11.6% to $870.90 an ounce in after-hours trading while oil rebounded $6.01 to settle at $97.16 per barrel. The Dow lost 449.36 pts or 4.06% to 10,609.66, S&P500 plunged 57.21 pts or 4.71% to 1,156.39 while Nasdaq fell 109.05 pts or 4.94% to 2,098.85.

Asian markets may open lower and may plunge again today after staging a moderate rebound yesterday. More worries from Wall St's financial system may grip investors and may cause more worries for banks around the region. Asian banks which have exposure to institutions in the US may be in tight spot as investors' confidence starts to fade away. The sector which may shine today is commodity sector as oil and gold prices rally last night. Oil was recently traded around $97ish per barrel, gold traded around $863.90ish and JPY traded around 104.38ish. Nikkei futures was closed at 11320 in CME last night compared to the close of 11650 here yesterday.

Kospi may open lower today, erasing yesterday's gains and may go down further. Kospi may test this year's lowest point and if it can break that, it may go down even further as confidence fade away for foreign and local investors. With oil price rebounded, commodity sector may get a boost but other sector like airlines may be hit hard as investors lock in profit after recent gains as oil prices dropped. Kospi may find its strong support at 175ish and may find its resistance at 182ish today.

Hangseng may open lower yet again today and may continue its way south after plunging more than 3% yesterday on more worries about banks' exposure to US' counterparts. Hangseng may test the 17000 level and may even break that level if investors are really panicking right now and as investors' confidence fade away. With oil prices rising, inflation fears may creep back in although oil still stayed below $100 per barrel. Airlines and travel sector may be hit further as oil rose while CNOOC and PetroChina may rise. Hangseng may find its strong support at 16500ish today and its resistance at 17300ish.