Asian market preview 24/06/2008

US markets ended mostly lower last night after oil prices rose and financials hit new lows in 5 years. The growing credit concerns has made investors to selloff financial shares and advisors also encourage investors to dump those shares. Investors also had little reason to buy shares ahead of The Fed's 2 day meeting starting from today. With lack of economic data, oil prices have become the main focus for investors and the rise of oil means more bad news for the overall economy as rising inflation means that The Fed is going to do something real soon. Oil price climbed $1.38 to settle at $136.74 even though the Saudis pledged to boost production by 200,000 barrels a day. The only sector which was boosted was oil players such as Exxon Mobil and Haliburton Co. while financials and airlines declined significantly. The Dow ended the day flat, losing 0.33 pts or less than 0.01% to 11842.36, S&P500 ended flat too, rising 0.07 pts or 0.01% to 1318.00 while Nasdaq fell 20.35 pts or 0.85% to 2385.74.

Asian markets may start the day flat today with more downward bias as oil prices keep rising and more sluggish outlook on the US financials. The Fed's 2 day meeting also provide reasons for investors to sit on the sidelines and wait for the news to come. The good sector to play in today is energy sector with oil nearing $137 mark again. Oil was recently traded around $137.38ish per barrel, gold traded around $882.50ish and JPY was around 107.84ish. Nikkei futures was closed at 13905 in CME compared to the close of 13865 here yesterday. A rebound seems quite likely too which may cause the market to be volatile today after Asian markets lost grounds for the past week.

Kospi may open flat today following a loss yesterday and may trade in thin volume as there are lack of economic data out of the US and ahead of the Fed's 2 day policy meeting. Oil prices may become the main focus as the rise in oil means more trouble for airlines and transport shares, as well as exporters. However, bargain hunters may kick in and may cause Kospi to trade higher too during the day and may cause quite a volatility in today's session.

Hangseng may open flat around 22700 today after a highly volatile session yesterday. The market may look for directions from the China markets as there are lack of direction from the US. Oil may also play a significant part for CNOOC, Sinopec and PetroChina today as the rise in oil benefit a company while hurting others. Volatility is expected to be high again today with more bargain hunting to be expected but the overall market still looks gloomy.