Asian market preview 29/09/2008

US markets were ended mixed on Friday as investors remained cautious after the $700 billion bailout proposals raised some doubts from Republican lawmakers. Investors were nervous and most of them were just waiting to see what will happen over the weekend. Big financial companies rose to lift the Dow while smaller financial companies were getting hit. Tech sector was also getting hammered after RIMM warned that its gross margins would contract for this quarter because of the costs of producing 3 new blackberry models. The market was also uneasy after Washington Mutual Inc. became the largest US bank to fail and was seized by FDIC before it was sold to JPMorgan for $1.9 billion. However, investors took some comfort as JPMorgan's decision to buy WaMu was considered to be good decision. Oil prices also declined as investors were uneasy about the outcome of the $700 billion bailout plan. Light, sweet crude fell $1.13 to settle at $106.89 per barrel. The Dow ended up by 121.07 pts or 1.10% to 11,143.13, S&P500 rose 3.83 pts or 0.32% to 1,213.01 while Nasdaq fell 3.23 pts or 0.15% to 2,183.34. Over the weekend, it seemed that lawmakers and Bush administration have finally came out with a deal and the $700 billion bailout proposals seems good. This may bring calm to the market and may give a short term rally ahead for Wall St and Global stock markets.

Asian markets may open higher following the news over the weekend that Congress and the Bush Administration have finally agreed on the terms for $700 billion bailout plans. More details still needed to be done but the idea was generally accepted by everyone and they're now waiting for the bill to be passed. President Bush called lawmakers and congressmen to rise to the occassion as failure to do so may bring more calamity to the wider economy. Crude oil was recently traded around $106.89ish per barrel, gold traded around $888.50ish and JPY traded around 106ish. Nikkei futures was closed at 12120 in CME on Friday compared to the close of 11910 here on Friday.

Kospi may open the day and start the week higher on investors' newfound optimism that the US government have finally agreed on the $700 billion bailout plan. The US government is basically going to buy all the toxic assets that are clogging the financial markets including bad mortgages and then it would later sell it again when the time is right. However, with the general idea finally gets accepted by congressmen, this will raise further question of whether $700 billion is enough to revive the whole economy and help America to avoid a great recession. Kospi may find its resistance at around 200ish today if investors are optimist and bullish enough and may find its support at around 195ish.

Hangseng may start the day higher with the news that US government have finally agreed on the bailout plan over the weekend. Hangseng was sold off on Friday as investors chose to exit and wait on the sidelines following the uncertainty on the US' bailout plan. However, with the plan now in place, Hangseng may find new energy to rally up today and may breach 20000 mark if investors are optimist enough. However, the contaminated dairy product scandal which have risen in China may hurt stocks as more and more dairy products like Oreo and M&Ms being taken off from public consumptions. China mainland market may also determine how high Hangseng will rise today. Hangseng may find its resistance at 20000ish and its support at 18900ish today.