Asian market preview 18/01/2008

US markets tumbled again overnight in the worst start to a year in more than 20 years. It even had the worst fall so far this year with Dow losing more than 300 pts. Markets did opened slightly higher but quickly turned south after Philadelphia Federal Reserve reported that its general economic index declined to -20.9, the lowest since October 2001, from -1.6 in December. This added to a growing conviction that the US is in a recession. Housing starts also decreased 14%, its lowest since 1991. Marril Lynch also reported a loss of $9.91 billion marking its worst Q4 ever. Dow lost 306.95 pts or 2.46% to 12159.21, S&P500 declined 39.95 pts or 2.91% to 1333.25 while Nasdaq fell 47.69 pts or 1.99% to 2346.90. Bernanke even said that a fiscal stimulus of as much as $150 billion would help revive economic growth and all these bad economic reports have made almost certain that the Fed will cut 0.5% rate to deal with the problem. Meanwhile, IBM reported a much better gains than forecast and AMD reported a loss in their Q4 reports.
Asian markets may open lower again today and may have to give up their gains from yesterday. Mounting fears of recession and with some investors said that recession is already underway in the US may affect the global market especially Asia and those companies with close ties to the US through export. It will be very hard for stocks to climb today with so much downward pressure and with if the US is in a recession, the world's economy will be much affected from it. Crude oil also declined last night to $89.80ish per barrel, gold was around $877ish and JPY is back around 106.50ish. Nikkei futures closed at 13345 in CME overnight, downed about 2.6% from the close of 13730 in Osaka and 13710 in Singapore yesterday.
The Kospi may open lower today following the tumble in the US markets ovenight. Exporters and financials maybe hit hard again today with the fears of recession in the US. Technology sectors may also be affected and some profit taking may happen after a decent gains from yesterday. Kospi may give up all of yesterday's gain where the market was closed more than 1% higher at around 218.95. Volatility maybe high again today with steep losses but there maybe some bargain hunters who will buy shares at bargain prices at this stage.
Hangseng may open lower today after US markets lost more than 2% overnight. Investors may also take their money off the table after a nice gains of more than 2% yesterday. Recession fears will make investors flee with their money right now and seek safe haven. Volatility maybe high again with steep losses are expected at the open but there's also investors who would buy cheap stocks. Hangseng may have to give up yesterday's gains and may also fall under 24000 if there's no positive sentiment in the market today.

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