Asian market preview 07/07/2008

US markets were closed for Indpendence Day holiday on Friday. European markets which were opened on that day declined to end the week lower which were the same to most Asian markets which was opened on Friday. US markets are expecting more data in form of Q2 corporate earnings besides more economic data and also higher oil prices. Earnings season will kick off unofficially on Tuesday starting with Alcoa Inc and also heavyweight GE to report on Friday. Investors will be watching these earnings report and see how the economical slowdown is going to affect these companies. Companies' target earnings have been lowered dramatically by analysts and investors are expecting that these lowered targets may be proved quite hard to beat as well. National Association of Realtors will be reporting on pending sales of existing homes on Tuesday, Labor Department to report its weekly reading on unemployment claims on Thursday, University of Michigan will release its preliminary reading on July consumer sentiment and Commerce Dept will be reporting US trade deficit on same day. Wall St finished last week with another decline, with Dow down 0.51%, S&P500 down 1.21% and Nasdaq fell 3.01%.

Asian markets may open the start of the trading week rather flat near Friday's closing numbers today with no cues from the US on Friday. Investors may start trading slightly higher on bargain hunting as markets have came down significantly for the past month. However, the higher sentiment on the markets may not last as investors may also be waiting for more solid grounds before making heavy bets on the stock markets. With oil approaching $150 per barrel, investors may find it hard to get the confidence they need. Oil was closed around $144.20 per barrel on Friday, gold was traded around $933.15 and JPY traded around 106.70ish. Nikkei futures was closed at 13255 here on Friday.

Kospi may open flat today with upward bias in the early trading hours. However, more selling pressure maybe expected today as investors may still want to unload stocks to wait on the BoK's rate decision also to see how the US earnings season will start off. Local investors may follow foreigners if they are still selling stocks. Kospi may find its support at 200 today and its strong support level is at March's lowest level of 196ish. Trading volumes may be thin but volatility may be high with bargain hunters may still come in at around these levels.

Hangseng may start the day rather flat today with no cues from the US markets. Investors may turn to Chinese markets for direction and Chinese banks may continue its rebound from Friday with more optimism that their earnings will be higher in Q2. However, selling pressure may mount up later on in the day as investors may choose to wait and see along the sidelines for more certainties from the US and globally. Hangseng may find its support at around 21200ish and may approach 21000 in the near term. 21700 may become quite a resistance for Hangseng. Trading volumes may be thin but volatility is expected to remain high today.