Asian market preview 20/10/2008

US markets were closed just moderately lower on Friday as investors were cheered by signs of easing in the credit market and managed to absorb weak economic news. Volatility was still quite high and the expiration of Options contracts add to the swings in the markets. Analysts have believed that markets were way oversold in such a short time and now they feel that markets finally realized that governments all over the world are trying to do everything they can to stop this from happening, and now many investors are bargain hunting. Warren Buffet's encouragement to buy US equities also helped to boost stocks in early trade but gains were given back at the end of the session. In economic news, the government said that new home construction dropped by more than expected last month to the lowest pace since 1991. However, bad economic news have already been expected by investors and now they focussed on the credit market. Libor rate seemed to ease up a little bit and that cheered investors' mood on Friday. The Dow ended the session down by 127.04 pts or 1.41% to 8,852.22 but ended higher by 4.75% for the week. S&P500 lost 5.88 pts or 0.62% to 940.55 but ended higher by 4.6% for the week. Nasdaq fell 6.42 pts or 0.37% to 1,711.29 but ended the week higher by 3.75%.

Asian markets may open higher today and may continue its rebound after steep selloff on Thursday. The mild loss in the US on Friday may bring little impact compared to the heavy losses in the previous sessions this month. Some easing in the credit market may cheer investors' sentiment worldwide and may help global stock markets. The slight rebound in oil may also help energy companies around the region. Oil was recently traded around $71.85ish per barrel, gold traded around $787.70ish and JPY traded around 101.55ish. Nikkei futures was closed at 8730 in CME compared to the close of 8455 here on Friday.

Kospi may open higher today after the government announced that they will provide $100 billion guarantee for banks' foreign debts to ease dollar shortage. In addition, they will also supply $30 billion to local banks and exporters. Bargain hunting may also emerge after the market was hammered quite bad for the past 2 sessions, losing more than 12%. However, investors' confidence may not have been fully restored as there are still more uncertainties from the US and that investors are still nervous about the whole global economic outlook. Kospi may find its resistance at 165ish and its support at 158ish today.

Hangseng may open higher as losses in the US is quite mild on Friday compared to the previous sessions and investors may think that it is a positive sign with the credit market showed some signs of easing. Bargain hunting may emerge and may boost stock market today as Hangseng have been hammered pretty bad for the past 3 sessions, losing almost 15%. Analysts' view that the global markets were way oversold may also give some hope for investors to buy stocks and may boost market further. Hangseng may find its resistance 15300ish and may find its support at 14600ish today.