Asian market preview 30/09/2008

US markets tumbled last night as bailout plan was rejected in congress. The Dow posted the biggest one-day drop ever, losing almost 780 pts. S&P500 and Nasdaq's percentage points drop was even bigger. Many traders have believed that it would take months for the plan to have its effect, but they also believe that it would be the first step to move forward to give some boost for the faltering economy. The bailout plan was unpopular in the first place and it would take great efforts to get approved by the congress. Shortly after the plan was rejected, US treasury secretary, Henry Paulson, vowed that he will work with congressional leaders to develop other way to help the sagging economy. The rejection of the bailout plan came after Commerce Department said that consumer spending fell in August to its lowest level in six months, while analysts expected it to rise slightly. The selling in NYSE was so intense that only 162 stocks rose and 3,073 stocks fell after the news of the bailout plan was rejected. Investors are fearing that the credit market will freeze up and the economy will continue to falter as all parties are afraid to lend money to each other. Meanwhile, oil prices tumbled more than $10 and other commodities prices also fell while gold rose as much as $23 during the US trading session. The Dow fell 777.68 pts or 6.98% to 10,365.45, S&P500 fell 106.85 pts or 8.81% to 1,106.42 while Nasdaq fell 199.61 pts or 9.14% to 1,983.73. With these losses, stocks value was decreased by around $1 trillion.

Asian markets are set to open lower today following the failure of the $700 billion bailout plan in the US overnight. Investors, some of whom have decided to sell off their holdings yesterday, may continue to sell off their stocks today as more uncertainty looms regarding the US financial system and its widespread effect across the globe. It would take great efforts by the US government to come up with a better plan and convince congress to give them some support. Investors will need confidence boost to start investing in the stock market again. Oil was recently traded at around $96.10ish per barrel, gold traded around $905.35ish and JPY traded around 103.77ish. Nikkei futures was closed at 10260 in CME compared to the close of 10640 here yesterday.

Kospi may open lower today following the failure of the bailout plan in US' congress last night. Investors may sell off their stocks and foreigners may take their investments from the South Korean market and prefer to hold cash in these uncertain times. Chipmakers may also get hit pretty bad after Apple and some other tech names in the US were downgraded last night. The only glimmer of light today for Korean market is the low oil price which may give some very slight support and hope for investors. Kospi may find its support at 170ish today and its resistance at around 177ish.

Hangseng may open lower today following the failure of the bailout plan in the US overnight and the selloff yesterday may intensify today. With property sector unable to lend support to the market, the only hope lies on the low oil prices which may give oil refiners some boost today. Investors will continue to wait on the sidelines for more news from the US and what other plan the US government can come up with. China mainland markets will remain closed today for national day holiday. Hangseng may find its support at 16000ish and its resistance at 17000ish today.