Asian market preview 21/11/2008

US markets plunged again last night to levels not seen since 1997 for S&P500 and the rest of major markets touched the lows formed in 2002. Financials and energy sector led the tumble in the markets today. Investors feared that the government's financial rescue won't be sufficient to cover banks' losses. Meanwhile, a 7% drop in crude prices hurt energy sector pretty bad last night. Investors are also concerned that the automakers bailout plan have hit a wall as Democratic leaders postponed another proposal by automakers to Dec 2. However, the pullback last night was seen as encouraging by some analysts as the selling volume was heavy last night and that was exactly what they were looking for. Heavy selling came after the markets breached a 5-year technical resistance point and fear took over for investors and they continue on selling. Markets are still looking for a bottom to get the turnaround they needed. Meanwhile, the number of people seeking unemployment benefits rose to 25 year high as shown by government data and a regional manufacturing gauge slumped as economic misery intensified. The Dow ended down by 444.99 pts or 5.56% to 7,552.29, S&P500 tumbled 54.14 pts or 6.71% to 752.44 while Nasdaq fell 70.30 pts or 5.07% to 1,316.12.

Asian markets may fall again today and some may re-test the lows touched in October. Fear and pessimism seem to be gripping the markets now as investors are afraid to make big investments around the region. Global economic outlook seem to be very gloomy now as the US recession deepened. More investors may also dump shares today ahead of the weekend and they want to preserve the leftover cash they have now. Oil prices plunged as investors fear that demands will keep faltering well into the next year. Crude oil was recently traded around $49.40ish per barrel, gold traded around $748.70. Gold rose as investors saw it as an alternative and safer investment during this time. JPY was recently traded around 94.13ish and Nikkei futures was closed at 7350 compared to the close of 7560 here yesterday. Nikkei may trade between 7000ish and 7500ish today.

Kospi may open lower yet again today and may test the October intraday lows today. Nervous investors may dump stocks again today. The losses may be intensified by Posco as its US ADRs fell 9.1% last night in US trading. Foreigners may keep running away from the local market, selling and try to hold cash from whatever stocks left to sell. Kospi may find its support at 115ish and its resistance at 125ish today.

Hangseng may open lower today following another huge selloff in the US which saw markets touched 11-year lows last night. More fear and uncertainties may grip investors today and they may decide to dump stocks. Petrochina may lead the losses as energy prices tumbled following the diminishing global demands. China mainland markets may also play a significant part to determine how deep the market will fall today. Hangseng may find its support at 11300ish and its resistance at 12300ish today.