Asia Morning Analytic: 230210: A Sideway Market

Morning readers,

Overnight choppy as S&P and Dow traded sideways, ending lower with commodities losing strength whilst banks gain. Remaining worries over Greece and Dubai linges on the market with Euro holding below 1.36, whilst dollar showing strength to hit commodities and various other risky currencies. This may demonstrate profit taking on US counterpart, as investors leave for the sideline for further directions.

Adding to the worries, it seems as though muni bonds are now on the spot light for credit issues as regional government finds it difficult to support its raising. This issue shall be more closely examined in our weekly thematic.

On an overall picture, we are remaining to see this macro uncertainty overhang, though reports supporting the market situation, that is generating this sideway market. GFA remains to issue caution over this market, though, as per yesterday's morning analytic, tilts our bias for near term upside for the asian bourse as reporting season begins in Asia which may find support. GFA also sees some profit takers to emerge today given a weak oversea lead, and some weak results that we saw last night - Parkson Retail Group.

On this note, actions on HSI today may remain slow, as volume did not return as per expected yesterday. We anticipate relatively flattish day, with more consolidation on the market. We are looking for a near term range from 20,000-21,000 with a break above 20,800 being significantly near term bullish signal.

GFA reiterates to favour consumption and export plays.

ongy out.