Asia Afternoon Analytic: 190210

Afternoon readers,

Our call today was spot with the additional comment after the daily's release showing that US raising discount rates caused a turmoil on the market. We saw HSI taking down, again, further than we thought - an extra 1% further, down 2.59%,experiencing a broadbase sell-off, which is the hardest hit amongst its asian peers. Hardest hit stocks came from the commodity space due to the dollar strength, whilst Chinese bank and properties also took hit, with ICBC down 3% and a broadbase selloff on the properties space. This may be a result of continual tightening impacting on the market. On the consumer space,Espirit took a strong hit, whilst papers, supermarket and department stores also took a strong hit down, possibly on valuation. This demonstrates market remains jittery over recent macro developments and investors are looking to exit after 5% run up from feb 11 lows, whilst fx continues to be a good lead for market movements.

From this note, we again, reiterate a greater caution for jittery market, as a break below 20,000 reignites the bearish trend down towards 18,000 that we have previously been describing. However, a broadbase selloff that was stronger than its asian peers may look for a rebound in near term above 20,000. Would advise this run as an opportunity to exit the market and wait on the sideline as HSI will remain to trade sideway in a volatile manner, looking at a range of 19800 - 20,800.

Would also comment on market being very macro-driven at the moment, and that it is extremely sensitive to the developments in EMEA and the suprise move by the Fed last night after markets. Near term, all eyes on US tonight to see how market reacts to US tightening for further leads. Closing off today, would continue to issue GREAT CAUTION over upcoming market behaviour.

ongy out.