Asian market preview 10/07/2008

US markets tumbled last night led by financials a day after that sector helped the markets to a big rally. Financial sectors tumbled on concerns that the credit crisis is far from over and more and more banks and lenders are needing more capital to support its existence. Freddie Mac and Fannie Mae were among those hardest hit with each falling 24% and 13% respectively. A better-than-expected earnings Q2 earnings result from Alcoa Inc also did not help lift the mood of investors as they feared that more bad news to come from the Q2 earnings report. Oil prices also fluctuated yesterday after Iran fired a test missile and was settled at $136.05 per barrel. US markets have officially entered bear market territory yesterday after tumbling more than 2% each. In these times of uncertainties, it is hard to be optimistic about stocks and even tech sector get hit after analyst put a negative note on Cisco. The Dow ended down by 236.77 pts or 2.08% to 11147.44 after rising more than 150 pts a day before, S&P500 fell 29.01 pts or 2.28% to 1244.69 while Nasdaq fell 59.55 pts or 2.60% to 2234.89.

Asian markets may open lower again today following a rebound which was fueled by US markets yesterday. Today, investors may turn sour again on stock markets as more fear and uncertainties came up from the US last night. The prolonged credit crisis problem in the US may cut financial sector's valuation by half. Investors may also leave from Asian markets as most Asian countries rely on export to the US and with the economic slowdown, exports may be hit hard. Financials may also be pressurised and high oil prices may still weigh down on investors. Oil was recently traded around $136ish per barrel, gold traded around $927ish and JPY traded around 106.88ish. Nikkei futures was closed at 13050 in CME, compared to the close of 13165 here yesterday. Nikkei may close below 13000 level today.

Kospi may open lower today and may extend its losses after closing at 14-month low yesterday. It may penetrate the 195 mark and may go toward the 190ish mark. BoK is expected to keep rate on hold at its highest level. LG display forecast 3rd quarter earnings may decline more than analysts' estimate as prices of LCD TV declines. Investors have been dumping stocks and although the market is oversold, there seems to be no end to the selling until there are some positive news for the market. Foreigners have been net sellers for the past few weeks.

Hangseng may open lower today after staging the biggest gain for the past 3 month yesterday. It may open around 21600-21700 today and may even erase the previous day's gains. China mainland markets may still be the driving force and if it keep on rising sharply, Hangseng may be saved from a sharp fall today. Hangseng may find support at around 21500 and a very stron support at 21000. It may find its resistance at 22000 today. The previous day's sharp rally may be a catalyst and reason for investors to dump stocks and have a profit taking session today.