Asian market preview 26/06/2008

US markets ended the session moderately higher after The Fed leaves interest rate unchanged as expected and issued a mixed assessment of the economy. The Fed stated that downside risks to growth have diminished somewhat and the upside risks to inflation and inflation expectation have increased. It was the first time in 10 months that The Fed leave rates unchanged. The Fed is at a crossroad, while household spending seems to be improving, job market and home prices are still tumbling. If The Fed raise rates prematurely, it may have a very negative effect on the broader economy and the recovery process. Crude oil price declined $2.45 to settle at $134.55 per barrel. Gold prices also slid while dollar weakened against major currencies. After hours, RIMM reported lower-than-expected revenue and EPS and gave out mixed guidance of 2nd half of the year and this sent the stock tumbling 9% in after-hours trading. The Dow ended marginally higher by 4.40 pts or 0.04% to 11811.83, after rising more than 100 pts after Fed's announcement. S&P500 rose 7.68 pts or 0.58% to 1321.97 while Nasdaq rose 32.98 pts or 1.39% to 2401.26.

Asian markets may open higher following a good performance in the US markets and after oil dropped overnight on the rise in US stockpiles. The Fed's decision to leave rates unchanged may help boost markets as it showed that The Fed is still waiting to see more recovery in the economic growth. However, a slightly weaker dollar may weigh on the exporter side today. Crude oil was recently traded around $134.48ish, gold traded around $884.60ish and JPY traded around 107.77ish. Nikkei futures was closed at 14000 in CME compared to the close of 13950 here yesterday.

Kospi may open higher at around 222ish today following a slightly stronger US market close. Oil sensitive stocks such as airlines may be boosted after oil dropped more than $2 per barrel. Market may not rise too much though as the market have already priced in on The Fed's unchanged rate decision and oil is still quite high around $134ish per barrel. Volatility may be quite high today as there are still more uncertainties in the broader economy and especially after RIMM gave out a disappointing report in after-hours US market.

Hangseng may open higher today at around 22800ish following a stronger US close overnight. Lower oil prices may help boost stocks in Sinopec and PetroChina, the 2 largest oil refiners. Hangseng may yet again follow cues from China mainland markets which will determine how strong the market will rise today or if the market may go back down again if China's market go down. Volatility may be high as bargain hunters may want to buy but with futures contract ending tomorrow, market may be quite erratic. Hangseng may find its support at 22500 today and its first strong resistance at 23000.