Hong Kong stocks are likely to trade firmer this week after US Federal Reserve chairman Alan Greenspan gave some reassurance about the current state of the US economy, dealers said. In his congressional testimony, Greenspan said he was not concerned about a serious slowdown in the US economy and reiterated that the Fed can continue to raise interest rates at a "measured pace."
His comments indicating the US economy is still on a reasonably firm footing will continue to support the market.
Analysts expect another round of interest rate hikes there, which will prompt local banks to follow suit. But such fears largely have been factored into the market. Hong Kong's economy is closely linked to that of the US and its currency is pegged to the greenback.
"I am quite upbeat about the market. The overall sentiment is quite good," said Herbert Lau, chief investment officer of CASH asset management at Celestial Asia.
Ben Kwong, head of research at KGI Asia, said he will continue to see rotational buying this week and believed retail stocks will perform well ahead of the September opening of the Hong Kong Disneyland.
For the week ending June 10, the Hang Seng Index rose 116.31 points, or 0.83 percent, to 13,934.76.
Lau expects the market to breach the 14,000-point level and reach up to the 14,200-point mark.
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