Asian market preview 22/03/2008

US markets soared for 2nd day on Friday on optimism that the government is doing everything they can to bring calm to the financial markets. Wall St however, still remains cautious as how far the government is willing to do to help the market. The Bush administration came up with a proposal on Saturday to get a $700B bailout package to the congress and hoped that it will get approval soon to help the markets. The package is viewed as needed by many economists but it brings about debatable points by some. Some economists and investors think that the package is quite "unfair" as it only helps to shield rich people to lose some of their money by making bad bets in the financial markets while it doesn't protect those taxpayers who owned homes and are about to get evicted cause they can't pay the debts to the lenders. Another step taken by the US government was to ban short-selling of 799 financial stocks for 2 weeks to help stabilize the markets. This step was indeed quite effective as investors rushed to switch their positions.

Asian markets may open higher today and may extend the global rally sparked by US governement's plans to bailout the troubled financial markets. Investors have found new optimism in the global financial markets and with the short-selling bans imposed, there are no other way but up. However, investors are still nervous with the bailout plans made by the US. Investors still think that the $700B rescue plan may not be enough to fully sustain the credit crisis fallout. Meanwhile, oil prices and gold prices rose too as investors still seek safe haven in a more conservative trading. Oil was recently traded around $104.55ish per barrel, gold traded around $874ish and JPY traded around 106.80ish. Nikkei futures was closed at 12440 in CME compared to the close of 12130 here on Friday.

Kospi may open higher today after the US markets staged the biggest 2-day rally on Thursday and Friday on government rescue plans. Now, with the $700B rescue plan the government is planning on, Kospi may get a boost further with the already oversold market. However, with as the rally on Friday already been so high, investors may still be quite nervous to make further big bets on the market. Today's rally may not be as much as Friday's and those nervous investors may pull some of their winnings back from the market as the situation is still quite uncertain. Kospi may find its support at 190ish and its resistance at 197ish.

Hangseng may open higher yet again today and may rise further as optimism grew in the US. China markets may determine if Hangseng will rise further on top of the 10% one day rally on Friday. Jittery investors may take some of their winnings off the table today and that may cause Hangseng to slowdown a bit after staging a late recovery on Thursday and a very huge gain on Friday. Hangseng may find its support at 19300ish and its resistance at 19800ish today.