Asia Morning Analytic: 260210: Further Concerns Materialising

Morning readers,

First of all, apologize for the missing daily yesterday. A quick glance over last night's movement is mainly the concern over Moody's downgrade on Greece, whilst the US posted relatively negative data as Durable Orders ex transportation fell, and continuous jobless claims saw a rise, sparking concerns over a jobless recovery. The combination of all these factors saw the market begain with a strong 2% drop which tapered off over the session as Euro saw bargain hunters coming into supporting the market.

The significant event overnight with Greece is significantly important, as we have earlier discussed that Greece's premier's plan may only hinder the inevitable, whilst on a greater realm, the unity of the euro continues to be under challenged.

We remain to believe market to be in a range trading mode, though the macro concerns may start to tilt the market back towards a negative tone, despite corporate fundamentals showing improvement.

We see a broadbase selloff today, as we have indicated throughout the past few post over continuous caution. Again, reiterating a break below 20,000 will remerge bears, whilst a break above 20,800 may see further gains on HSI.

Anticipating further bank hits today, whilst commodities to be hard hit from a strengthening dollar. Consumers space may continue to suffer from valuation, thought GFA believes they remain on the buying list for 2010, and that any dips poses buying opportunity. Also, export-related sector may go down due to negative US leads that suggests a slower rate of growth in G2 that dampens export demands.

ongy out.