Asian market preview 03/07/2008

US markets have officially entered the bear market territory after plunging yet again last night. Record high oil price helped the market to accelerate its losses in late afternoon ahead of a long weekend in the US. Oil settled at $143.57 per barrel after report showed that oil supplies fell more than expected and the rising tension in Middle East and rose further to $144.32 per barrel in after hours trading. Investors also cautious ahead of 4th of July holiday and employment data to be released later on tonight. Slightly positive news came on Wednesday after Commerce Department said that factory orders rose by 0.6% in May. GM stocks plunged 15% on fears that the company may face bankcruptcy. The Dow fell 166.75 pts or 1.46% to 11215.51, its lowest close since August 2006. S&P500 fell 23.39 pts or 1.82% to 1261.52 and Nasdaq fell 53.51 pts or 2.32% to 2251.46.

Asian markets may open lower today and may extend its losing streak yet again for most markets. High crude oil price may weigh on the markets and may cause investors to sell more stocks on fears that global economic slowdown may hurt companies' earnings. Japan's Nikkei experienced the longest losing streak in more than 40 years yesterday after the market closed lower for 10th consecutive sessions. Oil was recently traded around $143.97ish per barrel, gold traded around $942.70ish and JPY traded around 105.80ish. Nikkei futures closed at 13220 in CME compared to the close of 13425 here yesterday.

Kospi may open lower today and may extend its losses following bad inflation report yesterday and on concern that BoK may have to raise rates when they meet later next week. Kospi may test the 205 level and may even go further towards the 200 level if investors have really turned pessimistic. Volatility may be quite high again today if bargain hunters start to come in and just buy cheap stocks. Airline companies may post big drops again after oil traded at around $144ish per barrel.

Hangseng may open lower today at around 21500ish and may even test the 21000 level today if there's no positive sentiment to come out of the China mainland market. As usual, Hangseng may trade closely related to the Chinese markets and may take its cues to where the market is heading daily. It seems that China markets may have another rough session again today and it may cause Hangseng to go down further. Volatility may be high again as stocks is seen quite cheap now and the valuation of the stocks is quite fair. Hangseng may find its support at 21200 and may find its resistance at around 21900 today.