Markets in Asia expected to decline today

The Olympic is beginning today and although today may be a very auspicious date for the Chinese (8/8/08) because 8 means wealth, stock markets in Asia is expected to decline. The extreme storm in Hong Kong shifted to US, literally.



The Dow Jones industrial Average fell 224.64 points or 1.92% to close at 11,431.43 points yesterday as there are concerns in the financial sector, higher unemployment and lackluster retail sale. New concerns in the economy has arised as oil price has stop declining yesterday. Price of bonds increased as investors seek a more safer bet.

Investors in Singapore were already worried yesterday. The Singapore Straits Times Index was fell 1.84% yesterday and is expected to continue to fall today, expected to test support level at 2,800 points.

In Malaysia, stocks fell lower and market volume was relatively lower as all eyes and years were on former deputy prime minister Anwar Ibrahim being charged in court yesterday for alleged sodomy case. The benchmark composite index fell 0.35% yesterday. The KLCI may decline further and have more room to move downward because support level is at 1,090 points.

In Hong Kong, where market was suspended for one day on wednesday because of extreme storm climbed 0.7% higher yesterday but performance was rather weak because it closed lower than it closed about 300 points lower than the opening price. The HSI is currently in between the support and resistance level and is expected to fall heavily today.

There was a strong rebound in Thailand yesterday as SET index rose 4.3% or 29 points yesterday to close at the high of the day with 705.35 points, after finding support at 660 points, close to the support level of 664 points I established for SETI earlier. The SETI find support after price of oil starts to fall, cooling off the fear of rising inflation.

Brokers pointed out that the increase was in response to falling world oil prices and an influx of foreign funds. Probably US president's George visit to Bangkok encouraged some speculation to the Thai stock market. However, I expect this to be very short term and with the fall in the DJI, investors may lock in profits and this may send the SETI down aggressively.

Commentary and Analysis by Benny Lee