Asia Morning Analytics: 200110 Asia Opening

Morning all,

Overnight cues from the States bodes well, with healthcare and tech firms leading the market up 1% across the exchanges. Dollar rose, whilst treasury yields were up 2 basis point, suggesting the return of risk appetite over earnings.

Despite the dollar index moved up, commodities in general took an upward direction, with crude rebound from lows of 76s back to 78s. Gold was little changed from Asia, holding the 1130 levels real well. Such a move suggests some decoupling of the dollar correlation, and should be monitored closely.

Looking ahead for HSI today, would anticipate further recovery, looking to finish relatively strong around 21700-21800 mark, taking another 0.5% gains from yesterday.

Beaten down commodities stocks may stage for a rebound, and top pick would be sinopec (386.hk) @ 6.60, targeting 7.00 exit. Also, anticipate further recovery on various commodity stocks, such as Zijin (2899.hk) and Jiangxi Copper (358.hk) @ $18.00, targeting for $19.00.

Banks may continue a bit of a chaser run, though would not advice to chase for short term gains. However, as medium term investments, all three H-share banks looks attractive on valuation, with buys for ICBC (1398.hk) @ $6.00, CCB (939.hk) @ $ 6.20, as policy overhang fades.

Consumer names remains to be favoured, with NWDS (825.hk) @ 7.30 and Golden Eagle (3308.hk) @ 14.80, whilst Lianhua (980.hk) looks a bit overpriced and due for profit taking, However, Beijing Jinkelong (814.hk) looks good if a small retreat comes around.

Ports may be chasing on laggard, with Dalian (2880.hk) @ 3.32 and Tianjin Development (3382.hk) @ $2.60, targeting $3.00.

ongy out.