US markets fell last night after concerns that recession will worsen defaults among customers and will spread to other areas besides residential mortgage markets. UBS AG predicted that US unemployment will rise, which will reduce profit for credit card companies. Analysts told investors to sell bank shares such as American Express and Capital One Financials. Dow fell 108.03 pts or 0.85% to 12635.16, S&P500 fell 14.60 pts or 1.05% to 1380.82 while Nasdaq slipped 30.51 pts or 1.26% to 2382.85. However, it was only normal for markets to have some pullback after they have the best rally in 5 years last week.
Asian markets may open lower today following the sharp gains yesterday and after US stocks fell overnight due to renewed recession concerns. However, strong markets may still be expected within the Asia region. Crude oil rose overnight traded recently around $90ish per barrel, gold traded at $903ish and JPY traded around 106.60ish. Nikkei futures settled at 13790 in CME, lower than the close of 13900 here yesterday.
Kospi may have some pullbacks today, may open lower around 216ish after the soft US markets close overnight. Profit taking may take place after a huge rally from last week and yesterday. Investors may get into wait n see mode again after renewed concerns on US' recession. Volatility may still be high again in the market and this can be an advantage for us, day traders.
Hangseng may open lower around 24800ish after the fall in US' equities markets on renewed recession concerns and credit problems will spread to other areas besides housing. Investors may take off some of their winnings from the table which will cause more volatilities in the market and this can be used to our advantage.
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