QuickStockAnalysis.com

Their is optimism that the worst is in over is the sentiment in Asian markets. Benchmark indices in Australia, Singapore, South Korea, Taiwan and the Philippines all gained more than 2%.

At this levels, Korea, Singapore, Taiwan and Hong Kong are all trasing above the moving average, showing possitive prospects. Indonesia, Malaysia and Philippines still haven´t reach this condition, joining China and India in the not so optimistic group.

China finished slightly possitive after being 4,2% up in yesterday´s session. Of all asian markets, I believe China is the most overpriced one. I would not bet on it, due to the big inflation problem that they should fix. On the other hand, Yuan or Renmimbi, the local currency, will probably appreciate and there exists a good opportunity for investors.

Indonesia, that also rallied yesterday, has among others, rising global food prices and higher oil prices. Recent developments suggest to us that we may be entering a more serious stage of rising costs and weaker purchasing power. We believe today’s higher-than-expected inflation data signals that the government is losing control of the situation, and the battle against higher prices may be reaching a critical point. Overall risk rises as the population is priced out of necessities just as 2009 election approaches. With our view that a more likely outcome is higher interest rates, we maintain our Underweight call on the Indonesian market.