Asian market preview 23/10/2008

US markets fell sharply again last night and continued its downturn as investors' worries shifted from credit to health of corporate earnings and the future of economic growth. Markets fell more than 4% with S&P500 closed at its lowest level since April 2003. Corporate profit forecasts, a jump in the dollar and falling oil prices showed that investors are fearful that an economic slowdown will sweep the globe even if lending begins to approach normal levels. Investors are expecting quarterly corporate results to be weak and they are in panic mode so heavy selling is inevitable as analysts believed. Credit markets continued to show signs of easing but investors are more worried now about the current economic condition and how long will this slowdown last. However, analysts are still optimistic as trading volume was light last night compared to the heavy trading volumes in the past 2 weeks when markets plunged at record levels. Analysts said it is quite normal to see this kind of volatilities when the markets are recovering from heavy selling and when markets are searching for its real bottom. The Dow plunged 514.45 or 5.69% to 8,519.21, S&P500 fell 58.27 pts or 6.10% to 896.78 while Nasdaq fell 80.93 pts or 4.77% to 1,615.75.

Asian markets may open lower again today and may extend its decline on global economic worries. However, as markets reaching towards its lowest points formed just recently, bargain hunters may come in yet again to buy stocks at fire sale prices. Many analysts believed that global stock prices have become very cheap right now if they compare it to the Price/Earnings ratio. However, analysts also believed that whenever markets rally, it would only be a reason for investors to sell their holdings. Oil prices tumbled last night as dollar gained strength and as US stockpiles rose last week. Oil was recently traded around $67.55ish per barrel, gold traded around $726.60ish and JPY traded around 98.00ish. Nikkei futures was closed at 8200 in CME compared to the close of 8500 here yesterday.

Kospi may open lower again today and may continue its downward path as investors are desperate to sell their stocks and as foreigners also continued to do heavy sellings on Korean stocks. Gloomy economic outlook for South Korea and the weakening Won may contribute further selling in the Kospi. Kospi may find its support at 136ish and its resistance at 143ish today.

Hangseng may open lower today following the US' further downfall last night on global economic worries. Hangseng may be supported by better-than-expected earnings by Baidu and maybe some other companies. Low oil prices may also finally contribute to the local economic outlook and inflationary pressure to ease further which will leave room for government to take further measure to boost economy. Hangseng may find its support at 13200ish and its resistance at 14000ish today.