Rabu, 01 Oktober 2008

Asian market preview 01/10/2008

US markets soared higher last night after the biggest ever point drop for the Dow the day before. Investors came back into the markets as President Bush and top congress members and lawmakers vowed that they will revive the $700 billion bailout plan and will get an approval from the House Congress on Thursday. The bailout plan was surprisingly rejected yesterday as Congresmen think that the plan would not be able to jump start the economy. House members were flooded with phone calls after the rejection of the bailout plan, this time calling them to support for it or at least passes something in order to help with the economy. The cost of borrowing Dollar overnight increase the most after the defeat of the bailout plan. LIBOR (London Interbank Offered Rate) for 3-month dollar loans rose to 4.05% from 3.88% on Monday while LIBOR for 3-month euro loans rose to 5.27% from 5.22% on Monday. Banks are making it harder for people to borrow money and even qualified potential home owners are finding it hard to get home loans. On other news, Wall St was cheered by several economic readings where Consumer Confidence Index rose to 59.8 from 58.5 in August and better from a predicted reading of 55.5. Chicago Purchasing Managers' Index came in at 56.7 compared to 57.9 in August. The soaring markets last night wasn't unexpected as yesterday was the last trading day of the quarter and portfolio managers are trying to make their portfolios look better. However, investors are still very nervous about the frozen credit market. The Dow soared 485.21 pts or 4.68% to 10,850.66, S&P500 rose 58.35 pts or 5.27% to 1,164.74 while Nasdaq rose 98.60 pts or 4.97% to 2,082.33.

Asian markets may open higher today following the partial recovery on Wall St last night on speculation that the lawmakers are trying to do something to salvage the $700 billion bailout plan. Most Asian markets were trimming their losses yesterday after opening losing more than 5% for most markets. Markets may find some relief and bargain hunting may kick in today for Asian markets as they may find new optimism that lawmakers in US are working extra hard to get the bailout plan approved. Crude oil prices also bounced back last night and was recently traded around $100.60ish per barrel, gold traded around $880.80ish and JPY traded around 106ish. Nikkei futures was closed at 11680 in CME compared to the close of 11425 here yesterday.

Kospi may open higher today following yesterday's decline after the failure of the $700 billion bailout plan in the US. Kospi have recovered much of its losses yesterday where the market was closed losing only around 0.7% after opening down more than 5%. The temporary ban on short selling may give market more reason to buy today on top of new speculation that US lawmakers will eventually pass something. Kospi may find its resistance at around 195ish today and its support at around 188ish.

Hangseng is closed today for public holiday. The market recovered all of its early morning loss yesterday to close up 0.76%.

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