Asian market preview 06/05/2008

US markets were closed lower overnight after oil price touched record high and after Microsoft walked away from Yahoo $50 billion takeover bid. Retailers went south as the fear of higher oil prices will dent consumer spending. Profit taking also dominate the market as investors want to play it safe in these times of high oil prices and consumer products and also the economic weakness. Airlines companies also face increasing problems with energy prices climbing ever higher. With oil touched its highest intraday level yet at $120.36 and gold also climbed last night following the weakness in dollar. The Dow was closed lower by 88.66 pts or 0.68% to 12969.54, S&P500 fell 6.41 pts or 0.45% to 1407.49 while Nasdaq fell 12.87 pts or 0.52% to 2464.12. However, analysts judge that these pullback is quite normal judging that the market has ran up quite a bit since touching its lowest point in March. Now, investors will be focusing on high energy prices and might be worried about inflation problem as now the earnings season is almost done. On a positive side of the news, the ISM non-manufacturing index rose in April to 52 from an expected 49.1 as analysts anticipated earlier.

Asian markets may open lower, tracking the softer close on Wall St overnight following the high energy prices sparked inflationary concern and also that it will hurt consumer spending. Nymex light sweet crude touched its highest at $120.36 and was settled at $119.97 and gold rose higher as well, recently traded around $873ish. JPY recently traded around 104.65ish and Nikkei futures was at 14165 in CME last night, compared to the close of 14110 here on Friday. Nikkei is still closed for holiday today.

Kospi opened at around 239.80 and it went down further towards 238.95 at the time of this post being made. It has ran up again and reached its peak at 240.35 and currently traded at 239.50. Kospi seems to be quite strong here resisting the downward pressure from the high oil prices and the uncertainty in the global economy.

Hangseng may start the day lower at around 25900ish today tracking the soft regional markets. It may go down further towards 25700ish if the mainland China markets decided to have a profit taking session today following the recent gains and strength in the market. Oil refiners such as Sinopec and PetroChina may be in focus today with high oil prices slashed the profit margins made by these refiners. Should Hangseng decided to go back up, it may test the 26100 level again. However, analysts believe that the index may go below 26000 as investors would want to enjoy some profit while they're in the money after a recent 2000 points rally the past 2 weeks.