Asian market preview 29/10/2008

US markets had an astounding advance last night, with markets rose more than 10% and the Dow locking in a 890 points rise which was the 2nd biggest compared to the 936 points advance on Oct 13. There are no new fundamentals to support the rally last night and analysts believed that bargain hunters came in and built the rally from early in the session. Greed have replaced fear for now as some analysts said but they are still mostly pessimistic that the rally won't hold. The rally came as optimism rose that The Fed will cut its interest rate by 50 basis points at the end of its 2-day policy meeting today. Investors also looked past consumer confidence data, which fell to 38 compared to 51 expected by analysts. Analysts believed that there's a fire sale going on for stocks around the world and bargain hunters have come in to buy them now as they feel that the markets' plunge was overdone. The Dow surged 889.35 pts or 10.88% to 9,065.12, S&P500 rose 91.59 pts or 10.79% to 940.51 while Nasdaq rose 143.57 pts or 9.53% to 1,649.47.

Asian markets may open higher today and advance further following yesterday's big rebound. Stocks are really cheap compared to companies' valuation and investors may realize now that it is the right time to buy stocks for long term profitability. Even after companies gave out disappointing results, stocks still advance like Honda. There's also a growing speculation that BoJ is leaning toward cutting its interest rate to 0.25% and that fueled carry trade for JPY. Meanwhile, oil prices seen steady with downward bias too and was recently traded around $62.73ish per barrel, gold traded around $740.50ish and JPY traded around 98.20ish. Nikkei futures was closed at 8110 in CME compared to the close of 7590 here yesterday.

Kospi may open higher today following the big jump in US markets last night and Kospi may advance further as investors may start coming in again to buy stocks. Bargain hunters may dominate the market today as stocks are seen to be quite cheap now. However, volatility may still be high as there are no apparent good news to support the big rally in the US or for South Korea. The fundamentals are still the same as yesterday or last week. Kospi may find its resistance at 145ish and its support at 137ish today.

Hangseng may surge higher today and may build from yesterday's big rally. The good earnings from CNOOC may boost Hangseng but the prospect of bad earnings from Sinopec, Air China may limit its rally today. However, with stocks have fallen so much in recent days, greed may replace fears today and stocks may have quite a rally. Hangseng may find its resistance at 13500ish and its support at 12800ish today. More US economic data still to come out tonight and that may also limit the gains for Hangseng and other markets around the region as investors are still quite nervous.