Asian market preview 09/10/2008

US markets tumbled for the sixth straight session after an emergency rate cut failed to sustain markets' rally during the morning session. Markets initially rallied up after The Fed joined ECB, BOE, Bank of Canada, Swedish Riksbank and the Swiss National Bank to cut interest rate in an unprecedented move to battle credit freeze. After a while, markets zig-zagged in and out of positive and negative territory before finally gave up its gains in the final 30 minutes after Henry Paulson's comments stating that it could take weeks before the $700 billion bill starts to buy troubled mortgage-backed assets from banks. Global recession fears around the world have sent global markets tumbled down for the past week and yesterday alone, some markets lost over 10% and was shut down early. It is hard to determine the real bottom in this situation, although as we see, stocks are generally at bargain prices at these levels. Investors' confidence have to be restored before any stock markets rally can be sustained. Meanwhile, troubled insurance giant AIG will be granted an additional $37.8 billion in additional liquidity from New York Fed. Earning season have started too in the US and Alcoa gave a lower-than-expected profit while IBM's early report stated that it beat expectations. The Dow ended lower by 189.01 pts or 2% to 9,258.10, S&P500 fell 11.29 pts or 1.13% to 984.94 while Nasdaq fell 14.55 pts or 0.83% to 1,740.33.

Asian markets may open lower again today, but may limit its losses after mounting several heavy losses for the past week. The combined rate cut efforts performed by central banks worldwide may help give some comfort to investors and may breathe life to the stock markets around Asia today. However, volatility may still be very high as investors are still very much concerns regarding the overall global economic outlook. More steps are being arranged by central banks around the world to unclog the credit market so that banks would want to lend money more freely. Oil prices also dropped overnight, it is recently traded around $88.81ish per barrel and it eases inflation concerns around the world. Gold was recently traded around $907.50ish as investors seek have haven. JPY was recently traded around 99.50ish and Nikkei futures was closed at 9200 in CME compared to the close of 9165 here yesterday.

Kospi may open lower today but may turn to the upside following the rate cuts peformed by central banks worldwide last night. Some bargain hunting may also emerge if there's enough positive news around Asia to fuel a stock market rally today. Volatility may still be high today as investors are still very much fearful regarding the uncertainty of global economy but generally, Kospi have performed slightly better than other markets. Kospi may find its resistance around 170ish and its support at 160ish today.

Hangseng may open slightly higher and may perform a rally today after Hong Kong's central bank announced that they will cut interest rate by 100 bps today. The combined rate cuts peformed last night may also give reasons for investors to buy the already cheap stocks today. Technically, markets around the region are bound for a rebound, it's just a matter of time when will investors be confident enough to buy stocks and sustain markets' rally. Chinese markets may also set to rebound today after Chinese bank announced that it will start slashing rates to stimulate more growth to the economy. Hangseng may find its support at 14700 and its resistance at 16000ish today.

Indonesian stock market was closed early yesterday after it plunved more than 10% to its lowest close this year at 1,451.67. Market may find some life today if regional markets are strong enough to sustain a rally fueled by emergency rate cuts around the world. However, as investors' confidence have been hurt badly in recent days, market may still get heavy selling pressures. IHSG will still be closed today as market's officials are trying to determine when to open up the market again. If market is open today, it may find support at 1,400ish and resistance at 1,470ish today.