Asian Stocks Fall; Nikkei Declines 1.5%

NEW YORK (TheStreet) -- Asian markets traded broadly lower Tuesday, following the negative close in the U.S. session the previous day.

Japan's Nikkei 225 index closed 1.5% lower, while the Hang Seng index in Hong Kong was off by almost the same percentage.

Most of the selling came during the pre-trading hours as Wall Street trading was underway, while in the Asian cash market things moved very little. Some important Asian companies, such as Honda(HMC Quote), reported later in the day, which likely will add some pressure to the current market's valuation. The Japanese automaker reported better-than-expected profits after markets in Japan closed, and it raised its earnings outlook for the fiscal year.

The S&P 500 futures had a flat Asian session, as happens most of the time. The futures index just traded above the 1060.00 support area, after it plunged 25 points from the high of the day in Monday trade.

Companies that are exposed to foreign markets declined the most in Asian trade as investors are pricing in a slower recovery of the global economy. For the same reason, commodities lost ground throughout trading on Monday, something that sent the basic materials sector broadly lower Tuesday.

The financials, which were the biggest drag in the U.S. market in Monday, continued to decline during the Asian session. On the Hang Seng, the properties and construction sector plunged almost 3% after Hong Kong officials imposed rules to reduce properties speculations.

Crude oil for December delivery was recently trading at $78.77 a barrel, up by 9 cents.

Crude oil Technical View

Daily chart trend: Long. Main price points: 68 and 82. Looking for: Wave V

Oil currently is trading around $80 a barrel after the recent top around $82.00 zone and quite close to Fibonacci resistance levels shown between 83 and 84. Volume is not as strong read over the last 10 days, while the MACD is showing bearish divergence. All these reads are characteristics of wave V, which is the final sub-wave of a black wave 1), and is indicative of a reversal set-up.