Asian market preview 02/10/2008

US markets ended a relatively quiet day moderately lower last night as investors are waiting nervously for the senate vote on the new revised $700 billion bailout plan. The Dow initially lost more than 200 points in early morning trade but managed to recoup most of its losses as the bailout plan seems likely to pass the senate and house votes. Meanwhile on economic data, the Institute for Supply Management revealed a troubling drop in new orders. The Index of manufacturing activity fell to 43.5 in September from 49.9 in August and analysts have expected a reading of 49.5. Auto sales in the US also fell 27% as consumers curb spending on luxury items. The bailout plan which includes lots of 'sweeteners' such as tax breaks for businesses and the middle class, a provision to raise the cap on federal deposit insurance from $100,000 to $250,000 and other bits of new stuffs to win over the senate and house votes, is actually heading for a senate win on Wednesday night US time. Most people believe that with the win for the bill, it will unfreeze the credit market and banks would want to lend to each other again and businesses will also get the funds they needed for daily operations. The Dow ended down by 19.59 pts or 0.18% to 10,831.07, S&P500 lost 5.30 pts or 0.45% to 1,161.06 while Nasdaq fell 22.48 pts or 1.07% to 2,069.40.

Asian markets may open flat with tendencies to go higher today as the revised plan seem to be able to win senate votes and most likely to win over the house on Friday. The US government really think that they need to do something and the addition of 'sweeteners' on the bailout plan showed how serious they are to get the bill passed. Crude oil meanwhile fell last night as US inventories showed a surprise increase in supplies. Oil was recently traded around $98.84ish per barrel, gold traded around $876.80ish and JPY traded around 106.05ish. Nikkei futures was closed at 11580 in CME compared to the close of 11500 here yesterday.

Kospi may open rather flat with higher bias today following the optimism that the new, revised bailout plan will go through senate and get the required house votes. Kospi will be closed on Friday and if optimism flow enough among investors today, it may perform like Hangseng did on Tuesday as stocks rose in anticipation that the bailout plan will be successful. Kospi ended down yesterday as investors did not show the enthusiasm as they're still waiting for the revised bailout plan. Kospi may find its resistance at 193ish and its support at 185ish today.

Hangseng may open slightly lower but it depends on how the bailout plan perform in the senate floor today. By the time Hangseng open, the votes in the US senate will be over and that may determine the market's direction for today. Hangseng was closed yesterday for holiday and may continue its rally today if the senate are fully in favor of the plan and if it showed that the house will vote YES on the plan. Hangseng may find its resistance at 20000ish and its support at 18700ish today. China mainland markets are still closed today for a week long holiday.