Asian market preview 21/10/2008

US markets soared last night and ended more than 3% higher for all major markets on more signs of a reviving credit market and comments from Fed chairman Ben Bernanke. Investors saw that the Libor rate (bank-to-bank lending rate) has eased further and this brought some calm to the markets which have been heavily sold the past few weeks. Meanwhile Ben Bernanke also hinted that the government will take more steps to help the economy. The market liked what Bernanke had to say and with credit easing slowly, market realized that it is going to be a process. Analysts believed that the steps taken by government finally have some impact on investors' sentiment and that the not-so-dismal start to the earnings season contributed to the rally in the markets. Last night, oilfield services provider, Halliburton Co. topped estimates and said that any macroeconomic problems will ultimately correct themselves. Still, there are still much fears in the market as demand for treasury bills is still quite high. Analysts also believed that according to past history, recovering markets will face further turmoil in price swings and may even test their lows yet again. The Dow ended up by 413.21 pts or 4.67% to 9,265.43, S&P500 rose 44.85 pts or 4.77% to 985.40 while Nasdaq rose 58.74 pts or 3.43% to 1,770.03.

Asian markets may open higher today following Wall St big rally last night on optimism that the credit market is finally easing and that more steps will be taken by the US to support the weakening economy. Markets may not be fully confident and reverse course but short-term rally may take place and may get supported if earnings reports from local companies also give reason for investors to buy. Oil prices rose last night and was recently traded around $75.69ish per barrel, gold traded around $798.50ish and JPY traded around 101.90ish. Nikkei futures was closed at 9360 in CME compared to the close of 9025 here yesterday.

Kospi may open higher today following more optimism from the US. However, with much uncertainties still linger around the air, the Kospi may not have a full rally and may have wild price swings like it did yesterday. Kospi touched its lowest price this year yesterday at 150.85 and although it may not go to that point again today, volatility will remain quite high. Investors' confidence may not be fully restored as the process in recovering the global economic condition is quite slow. Some melamine problems found in biscuits may give some pressure on the market as well. Kospi may find its resistance at 167ish and its support at 160ish today.

Hangseng may open higher today and may continue its rally from yesterday following more optimism from the US regarding the credit crisis. However, the rally may not be fully supported as lower-than-expected earnings from China Mobile may weigh on the market after it helped the market in previous session. The losses in Citic Pacific may also weigh on the market and the overall performance of Chinese mainland markets may determine Hangseng's movement today. Hangseng may find its resistance at 16200ish and its support at 15300ish today.